• Gold regains positive traction on Wednesday amid escalating US-China tensions over Taiwan.
  • The emergence of fresh USD selling turns out to be another factor lending support to the metal.
  • The overnight hawkish remarks by several Fed officials keep a lid on any meaningful upside.

Gold attracts some dip-buying near the $1,755 region on Wednesday and stalls the previous day's sharp retracement slide from a four-week high. The XAU/USD maintains its bid tone through the first half of the European session and is currently trading around the $1,766 area, just below the daily high.

Heightened geopolitical tensions caused by US House Speaker Nancy Pelosi's Taiwan visit turns out to be a key factor offering support to the safe-haven gold. China condemned the highest-level US trip to Taiwan in 25 years and responded with a flurry of military exercises, and announcing the suspension of several agricultural imports from Taiwan.

The intraday uptick is further supported by the emergence of some US dollar selling, which tends to benefit the dollar-denominated commodity. A mixed performance around the US Treasury bond yields fails to assist the USD to capitalize on the overnight bounce from a multi-week low, though bets for further Fed rate hikes help limit losses.

In fact, several Fed officials sounded hawkish on Tuesday and hinted that more interest rate hikes are coming in the near term. The markets were quick to react and assist the US Treasury bond yields to recover swiftly from their lowest level since April. This is holding back bulls from placing aggressive bets around the non-yielding gold.

Furthermore, investors seem reluctant and prefer to wait for a fresh catalyst before positioning for the resumption of the recent recovery from the $1,680 area, or a 15-month low touched in July. Hence, the market focus would remain glued to the release of the closely-watched US monthly jobs report - popularly known as NFP on Friday.

The data would play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for gold. In the meantime, traders on Wednesday might take cues from the release of the US ISM Services PMI. This, along with the US bond yields, could drive the USD demand and provide some impetus.

Technical levels to watch

XAU/USD

Overview
Today last price 1766.54
Today Daily Change 6.22
Today Daily Change % 0.35
Today daily open 1760.32
 
Trends
Daily SMA20 1731.28
Daily SMA50 1793.49
Daily SMA100 1849.4
Daily SMA200 1842.17
 
Levels
Previous Daily High 1788.04
Previous Daily Low 1760.07
Previous Weekly High 1768.04
Previous Weekly Low 1711.55
Previous Monthly High 1814.37
Previous Monthly Low 1680.91
Daily Fibonacci 38.2% 1770.75
Daily Fibonacci 61.8% 1777.36
Daily Pivot Point S1 1750.91
Daily Pivot Point S2 1741.51
Daily Pivot Point S3 1722.94
Daily Pivot Point R1 1778.88
Daily Pivot Point R2 1797.45
Daily Pivot Point R3 1806.85

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays below 0.9800 after US inflation data

EUR/USD stays below 0.9800 after US inflation data

EUR/USD continues to trade in negative territory below 0.9800 in the American session on Friday. The data from the US showed that the annual PCE inflation declined to 6.2% in August but the stronger-than-expected core reading didn't allow the pair to gain traction.

EUR/USD News

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD rebounds from daily lows, reclaims 1.1100

GBP/USD fell to a fresh daily low below 1.1030 but managed to reverse its direction and climbed above 1.1100 during the American trading hours on Friday. The pair remains on track to snap a two-week losing streak despite having suffered heavy losses earlier in the week.

GBP/USD News

Gold extends daily rally beyond $1,670

Gold extends daily rally beyond $1,670

Gold preserved its bullish momentum and rose above $1,670 after the mixed inflation data from the US on Friday. The benchmark 10-year yield is down more than 2% as markets look to wrap up the third quarter, fueling XAU/USD's daily rally. 

Gold News

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shytoshi Kusama, the project lead for Shiba Inu, has dropped a teaser about Shiba Eternity games for the SHIB community. Proponents expect the launch of the collectible card game to be a bullish catalyst for Shiba Inu price. 

Read more

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

SPDR S&P 500 ETF Trust (SPY) Forecast: We are teetering on the brink

Equity markets remain at the precipice of a technical collapse, which we examine in the weekly long-term chart below. The overall picture remains one of nervousness ahead of the upcoming Q3 earnings season.

Read more

Forex MAJORS

Cryptocurrencies

Signatures