XAU/USD price is treading water on Wednesday, hovering near $3,340 during the European trading session. The precious metal is attempting to stabilize after falling to a three-week low of $3,300 on Monday. Although price action remains subdued, Gold is oscillating in a narrow range between $3,300 and $3,340.
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Safe-Haven Appeal
Easing trade tensions have dampened Gold’s safe-haven appeal, keeping gains in check. However, a softer US Dollar (USD) and a modest pullback in Treasury yields are offering some support. Still, overall risk-on sentiment in the markets is limiting upside momentum as traders brace for the Federal Reserve (Fed) monetary policy decision, due Wednesday at 18:00 GMT.
XAU/USD Price Technical Perspective
From a technical perspective, XAU/USD is testing a key confluence zone on the daily chart, where the 50-day Exponential Moving Average (EMA) at $3,323 overlaps with a rising trendline support drawn from March lows. While the price is currently trading marginally below the ascending trendline, the breach lacks strong momentum, suggesting it may be a false breakout.
The metal remains in a broader uptrend, but short-term momentum has weakened, suggesting indecision as traders await the next catalyst. That catalyst will likely be the Fed’s monetary policy decision on Wednesday. A clear breakout above $3,350 could trigger a bullish continuation, while a breakdown below the 50-EMA might expose the 100-day EMA near $3,233.
Momentum indicators tilt bearish but lack conviction. The Relative Strength Index (RSI) has slipped below the neutral 50 mark, currently at 47, indicating weakening bullish momentum with further room to enter oversold territory. The MACD also remains in negative territory, with the signal line crossing above the MACD line and the histogram printing small red bars, pointing to mild downside pressure.