On Tuesday, the softer US Dollar has drawn some buyers towards the gold price. As a result, the XAUUSD stands at 1,962.08 with the support gained.

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• Gold price attracts some buyers on Tuesday and draws support from a softer US Dollar.

The pair currently trades last at 1962.08.

The previous day high was 1967.05 while the previous day low was 1949.26. The daily 38.2% Fib levels comes at 1956.06, expected to provide support. Similarly, the daily 61.8% fib level is at 1960.25, expected to provide support.

Gold price edges higher on Tuesday, for the first day in the previous three, and sticks to a mildly positive tone heading into the European session. The XAU/USD is currently placed around the $1,960 region, up over 0.20% for the day, though lacks follow-through buying and remains well within a familiar trading range held over the past three weeks or so.

The US Dollar (USD) struggles to capitalize on its modest gains registered over the past two days and comes under fresh selling pressure in the wake of expectations for an imminent pause in the Federal Reserve’s (Fed) year-long policy tightening cycle. This, in turn, is seen as a key factor lending some support to the US Dollar-denominated Gold price. It is worth recalling that the markets are pricing in a greater chance that the US central bank will keep interest rates on hold at the end of a two-day Federal Open Market Committee (FOMC) meeting on Wednesday. The bets were lifted by the recent dovish rhetoric by several Fed officials, which leads to a fresh leg down in the US Treasury bond yields and continues to undermine the Greenback.

That said, surprise rate hikes by other major central banks – the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) – last week suggest that the fight against inflation is not over yet. Moreover, inflation in the United States (US) is still trending above the 2% target, which, along with a robust labor market, supports prospects for further tightening by the Fed. In fact, the CME FedWatch tool point to a 20% chance of another 25 basis point (bps) lift-off at the July FOMC meeting. Adding to this, rising bets for additional rate hikes by the European Central Bank (ECB) and the Bank of England (BoE) contribute to capping gains for the non-yielding Gold price. Traders also seem reluctant to place aggressive bets ahead of the key macro data/event risks.

A rather busy week kicks off the release of the latest US consumer inflation figures, due later during the early North American session. A stronger US Consumer Price Index (CPI) print would revive hopes for a more hawkish Fed, which is scheduled to announce its policy decision on Wednesday. This will be followed by the ECB meeting on Thursday and the BoJ monetary policy update on Friday. The latter is expected to maintain its ultra-loose policy, while the ECB is set to hike its benchmark rates by 25 bps. In the meantime, worries about a global economic slowdown, particularly in China, might continue to benefit the safe-haven Gold price and help limit any meaningful downside, warranting some caution for aggressive traders.

From a technical perspective, any subsequent move up is more likely to confront stiff resistance near Friday’s swing high, around the $1,973 region. This is followed by the $1,983-$1,985 supply zone, which if cleared decisively might trigger a short-covering move and lift the Gold price to the $2,000 psychological mark. The XAU/USD could extend the upward trajectory and eventually climb to the next relevant hurdle near the $2,010-$2,012 region.

On the flip side, any meaningful slide might continue to attract fresh buyers and find decent support near the 100-day Simple Moving Average (SMA), currently pegged around the $1,942-$1,941 area. A convincing break below will make the Gold price vulnerable to accelerate the fall towards the $1,900 mark. Some follow-through selling will expose the very important 200-day SMA, around the $1,842 area, with some intermediate support near the $1,876-$1,875 horizontal zone.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1959.63 at the time of writing. Pair opened at 1957.86 and is trading with a change of 0.09 % .

The pair is trading below its 20 Daily moving average @ 1962.01, below its 50 Daily moving average @ 1989.95 , above its 100 Daily moving average @ 1941.51 and above its 200 Daily moving average @ 1842.83

The previous day high was 1967.05 while the previous day low was 1949.26. The daily 38.2% Fib levels comes at 1956.06, expected to provide support. Similarly, the daily 61.8% fib level is at 1960.25, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1949.06, 1940.27, 1931.27
• Pivot resistance is noted at 1966.85, 1975.85, 1984.64

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