Gold Price Analysis: XAU/USD stays sluggish around $1,780 ahead of Federal Reserve
|- Gold remains pressured below $1,800 with limited action.
- Markets sentiment dwindles amid doubts over US stimulus, covid conditions and vaccinations.
- Pre-Fed mood could drag moves but risk catalysts become the key drivers.
Gold prices hold lower ground near $1,776, depressed for the second consecutive day, amid the initial Asian session on Wednesday. The yellow metal’s downside break of the short-term key support line fails to entertain the bright metal traders as market sentiment turns cautious ahead of the US Federal Reserve (Fed) monetary policy meeting.
Cautious sentiment backs the bears eyeing limited moves…
In addition to the typical pre-Fed behavior, mixed clues concerning the coronavirus (COVID-19) and US President Joe Biden’s stimulus plans join the upbeat US data to confuse gold traders.
Worsening virus conditions in India and Japan raise doubts over the recently upbeat global economic performance. India marked the sixth day of above 300K infections even as multiple nations send help to battle the pandemic.
Elsewhere, the US is up for removing mask mandate in less congested places while Spain is ready to welcome the UK travelers again from this June. It should, however, be noted that the mixed progress of the vaccine jabbing also adds to the market’s confusion.
Furthermore, the US Conference Board’s (CB) Consumer Confidence jumped in April but the housing data came in mixed, which in turn troubled traders.
Amid these plays, Wall Street closed with no major moves even as the US 10-year Treasury yield rallied the most in six weeks.
Looking forward, Australia’s Q1 Consumer Price Index (CPI) and Japan Retail Trade may entertain Asia-Pacific traders during early Wednesday. However, a light calendar afterward may magnify the pre-Fed trading lull and could result in gold’s inaction.
Technical analysis
Sustained break of monthly support line, now resistance around $1,784, backs gold sellers targeting $1,760-58 area. However, cautious sentiment ahead of the key event may tame the downside. Meanwhile, $1,798 and a 100-day SMA level of $1,801 add to the upside filters.
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