XAU/USD stabilizes around $2,420 awaiting FOMC Minutes

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Gold traded slightly lower on Tuesday as the US Dollar benefited marginally from market pessimism. The XAU/USD pair hovers around $2,420, after hitting an intraday low of $2,406.10.

Asian and European indices retreated as investors took profits ahead of earnings reports, though there were no new catalysts. The macroeconomic calendar had nothing significant to offer on Tuesday, with another round of Federal Reserve (Fed) officials’ speeches failing to impress.

Meanwhile, the Fed’s Council released its 2023 Economic Well-Being of US Households report, examining the financial circumstances of US adults and their families. The document showed that overall, “financial well-being remained virtually unchanged from 2022, as rising prices continued to challenge most households and workers continued to benefit from a strong labor market.” The news is quite discouraging, especially considering that inflation rebounded in the first quarter of the year, further diminishing the likelihood of multiple rate cuts throughout the remainder of the year.

Looking ahead, the Federal Open Market Committee (FOMC) will release the minutes of its latest meeting on Wednesday. Markets expect clarity on the timeline of the monetary policy shift, something policymakers have so far refused to provide.

Short-term technical outlook for XAU/USD

From a technical standpoint, the XAU/USD pair remains near the new all-time highs reached on Monday, losing its bullish momentum but far from turning bearish. The daily chart shows the pair well above a slightly bullish 20-day Simple Moving Average (SMA), currently around $2,345. Longer SMAs maintain their bullish slope below the shorter one. However, technical indicators are retreating from near overbought readings, though without real bearish strength.

Technical readings on the 4-hour chart suggest that the XAU/USD pair may remain under slight pressure in the short term. Technical indicators continue to retreat within positive levels, though a bullish 20-day SMA provides intraday support, now around $2,408.40. Lastly, the 100 and 200 SMAs maintain a modest upward slope above $100 and below the current price, far enough to be relevant.