Gold Prices Hold Positive Ground Ahead of Fed Chair Powell’s Testimony

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Gold Prices Hold Positive Ground Ahead of Fed Chair Powell’s Testimony

Gold prices (XAU/USD) are trading with slight gains due to the weakness of the US Dollar (USD) during the early Asian session on Tuesday. The downside for the precious metal could be limited as traders increase their bets that the US Federal Reserve (Fed) will cut interest rates in September, following last week’s weak US employment data. Additionally, the cautious mood amid political uncertainties in France and geopolitical tensions in the Middle East could boost the price of gold, a traditional safe-haven asset.

However, gold prices could be dragged lower by the People’s Bank of China (PBoC) decision not to buy gold. China, the world’s largest gold consumer, kept its gold holdings unchanged for the second consecutive month in June, after 18 months of purchases. These figures indicate that their reserves remained at 72.8 million ounces, valued at approximately $170 billion.

Gold traders will be watching the semi-annual testimony of Fed Chair Jerome Powell, along with speeches from the Fed’s Michael Barr and Michelle Bowman. On Thursday, the focus will be on the US Consumer Price Index (CPI) inflation data.

Technical Analysis: Gold Price Bias Remains Bullish in the Long Term

Gold prices are trading positively today. The yellow metal sustains a breakout above a descending trend channel formed on May 10th. According to the daily chart, the precious metal maintains an upward trend above the 100-day exponential moving average (EMA), with the 14-day Relative Strength Index (RSI) remaining in bullish territory above the midline of 50. This indicates that the support level is likely to hold rather than break.

The psychological level of $2,400 acts as an immediate resistance level for XAU/USD. The next upside barrier to watch is $2,432 (April 12th high) en route to $2,450 (all-time high).

On the downside, the first target emerges at $2,340 (previous resistance level). Any further selling below this level would pave the way towards $2,273 (100-day EMA).