#XAUUSD @ 1753.15 -imp levels: Gold regains some positive traction for the second successive day, though lacks follow-through.

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• Gold regains some positive traction for the second successive day, though lacks follow-through.
• Recession fears continue to weigh on investors’ sentiment and benefit the safe-haven XAU/USD.
• Hawkish Fed expectations, elevated US bond yields, renewed USD buying cap gains for the metal.

The pair currently trades last at 1753.15.

The previous day high was 1754.14 while the previous day low was 1730.89. The daily 38.2% Fib levels comes at 1745.26, expected to provide support. Similarly, the daily 61.8% fib level is at 1739.77, expected to provide support.

Gold attracts some dip-buying near the $1,744 region and turns positive for the second straight day on Wednesday. The XAU/USD climbs back above the $1,750 level during the early European session, closer to the weekly high touched on Tuesday, though any meaningful upside still seems elusive.

Growing worries about a global economic downturn and headwinds stemming from fresh COVID-19 lockdowns in China continue to weigh on investors’ sentiment. This is evident from a generally weaker tone around the equity markets, which turns out to be a key factor offering some support to the safe-haven gold. That said, the emergence of fresh US dollar buying might hold back traders from placing aggressive bullish bets around the dollar-denominated commodity.

The overnight knee-jerk reaction to the dismal US PMI prints turns out to be short-lived amid firming expectations for a further policy tightening by the Fed. In fact, the markets are still pricing in at least a 50 bps rate hike move at the September FOMC monetary policy meeting. This remains supportive of elevated US Treasury bond yields, which assists the USD to regain positive traction and might further contribute to capping gains for the non-yielding gold.

Furthermore, Fed Chair Jerome Powell is anticipated to deliver a more hawkish message at the Jackson Hole symposium on Friday, further warranting some caution before positioning for additional gains. Market participants will look for fresh clues about the possibility of a supersized 75 bps Fed rate hike in September. This will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for gold.

In the meantime, traders on Wednesday will take cues from the US economic docket – featuring Durable Goods Orders and Pending Home Sales data later during the early North American session. This, along with the US bond yields, will drive the USD demand and provide some impetus to gold. Apart from this, the broader risk sentiment might further contribute to producing short-term trading opportunities around the XAU/USD.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1752.03 at the time of writing. Pair opened at 1748.17 and is trading with a change of 0.22 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1769.83, 50 SMA 1771.42, 100 SMA @ 1825.49 and 200 SMA @ 1839.05.

The previous day high was 1754.14 while the previous day low was 1730.89. The daily 38.2% Fib levels comes at 1745.26, expected to provide support. Similarly, the daily 61.8% fib level is at 1739.77, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1734.66, 1721.15, 1711.41
• Pivot resistance is noted at 1757.91, 1767.65, 1781.16

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