XAU/USD Current price: $2,758.02
- Risk aversion dominated the first half of Tuesday, although sentiment improved.
- The Federal Reserve will announce its monetary policy decision on Wednesday.
- XAU/USD trades with a positive tone in the near term, with room to extend gains.
Gold trades marginally higher on Tuesday, still down for the week. XAU/USD recovered from an intraday low of $2,734.68 and approaches the $2,600 mark in the mid-American session. Financial markets were risk-averse throughout the first half of Tuesday amid fresh tariff-related concerns following comments from United States (US) President Donald Trump. Trump said he does not want gradual tariffs, as proposed by his Treasury Secretary Scott Bessent on Monday. Bessent suggested on Monday that the country could impose gradual levies of 2.5%, which could be increased periodically.
The dismal mood somehow eased ahead of Wall Street’s opening, with the three major indexes now trading in positive territory. Gains however, are modest as investors gear up for the Federal Reserve (Fed) monetary policy announcement. The Fed is undergoing a two-day meeting, which will conclude on Wednesday. Officials will announce their decision afterwards, with officials widely anticipated to keep interest rates on hold. Whereas the accompanying statement and Chairman Jerome Powell’s speech are dovish or hawkish and will decide the market’s direction.
XAU/USD short-term technical outlook
From a technical point of view, the daily chart for XAU/USD suggests the corrective decline is over. Gold may extend its recovery, as it trades above all its moving averages, with a bullish 20 Simple Moving Average (SMA) gaining upward traction above also bullish 100 and 200 SMAs. Technical indicators, in the meantime, slowly gain upward traction within positive levels and after correcting overbought conditions.
In the near term, and according to the 4-hour chart, the picture is neutral-to-bullish. Technical indicators aim north, although the Momentum indicator remains below its 100 line. At the same time, XAU/USD is barely surpassing a flat 20 SMA, while the longer moving averages maintain their bullish slopes well below the current level.
Support levels: 2,747.20 2,734.60 2,716.50
Resistance levels: 2,764.85 2,777.30 2,789.95
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