Gold: Pre-Fed minutes jitters to keep the yellow metal underpinned

Having witnessed good two-way businesses, Gold (XAU/USD) managed to close Tuesday above the critical $2000 mark. However, the sellers took over and downed gold as low as $1976, in the face of the record highs on the S&P 500 index. Gold prices are back under the $2000 level so far this Wednesday, dragged down by the bounce in the US dollar across the board, consolidating Tuesday’s volatile trades while below the 21-hourly Simple Moving Averages (HMA) at $2003, FXStreet’s Dhwani Mehta briefs.

Key quotes

“The dollar bounce could be associated with the official announcement of Joe Biden as the Democratic nominee for the November US Presidential elections. However, the bright metal could regain poise should the minutes of the Fed's latest meeting hint at yield curve control or project dour long-term economic outlook. Meanwhile, the sentiment on the global markets will continue to influence the gold price action.”

“The immediate resistance for the spot is aligned at $1996, the 23.6% Fibonacci Retracement level of the latest advance from $1929 to $2015. Acceptance above the 21-HMA will call for a test of the August 11 high at $2030.”

“To the downside, the $1980-75 zone is the level to beat for the bears. That area is the confluence of the upward-sloping 50-HMA, horizontal 200-HMA, previous day low and 38.2% Fib level of the same rally. The hourly RSI, currently at 45.00, points south, suggesting that the aforesaid support could be tested. The next downside target is at $1972, the Fib 50% level below which the bullish 100-HMA at $1965 could stall the near-term downside momentum.”