Gold (XAU/USD) is steady in early Asian trade, underpinned by ongoing geopolitical tensions which typically enhance the safe-haven appeal of the precious metal (Gold Silver).
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Demand for safety kept the Gold confined within a well-defined range on Tuesday, with the pair hovering around $3,390 as investors eyed the escalation in the Middle East crisis.
Israel’s military issued two warnings about incoming missiles early Wednesday morning, local time, saying that launches had been detected aimed from Iran and that it was trying to intercept them. “The environment for the precious metal remains favourable,” Commerzbank Research’s Thu Lan Nguyen says in a note. The head of FX and Commodity Research cites factors including geopolitical uncertainty staying high. Spot gold is little changed at $3,389.42/oz.
Gold (XAU/USD) Short-term technical outlook
The Gold (XAU/USD) pair trades in the $3,384 region, and the daily chart shows it has spent the journey confined to a tight range. The pair has lost its positive momentum, but the overall risk skews to the upside, given that technical indicators have turned flat well above their midlines. Additionally, XAU/USD develops above all its moving averages, with the 20 Simple Moving Average (SMA) partially losing its bullish strength, yet holding far above bullish 100 and 200 SMAs.
In the near term, and according to the 4-hour chart, Gold price has room to ease further. The pair trades below its 20 SMA, which caps advances at around $3,406.90. The 100 and 200 SMAs remain directionless below the current level, while technical indicators grind lower within negative levels. Still, the risk-averse environment will likely prevent the pair from falling further.
Also Read: Spot Gold, Door Open for $3600—$3800, Need Patience.
Federal Reserve (Fed)
The US Federal Reserve (Fed) is expected to keep interest rates on hold when it announces its monetary policy decision on Wednesday. US officials will also present a fresh Summary of Economic Projections (SEP), with fresh inflation, growth and employment perspectives.
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