- The FOMC’s minutes are likely going to be the next market-mover for gold. It scheduled for Wednesday at 18:00 GMT.
- The correction in USD helps gold prices to be supported on Tuesday.
Gold is trading at around $1292.00 a troy ounce virtually unchanged on Tuesday.
Gold found an intraday floor at 1288.00 in Europe and then bounce to the 1296.00 level in the early American session. The metal has retreated from the level and is now trading in the 1292.00 region.
Gold is mainly inversely correlated to the US Dollar Index (DXY) which saw some profit-taking in early European session helping gold reach the 1296.00 region which is a major weekly resistance zone level. However, both DXY and the US 10-year Treasury yield are being rather supported in the American session.
On the geopolitical front the recent news that US and China have put the trade war “on hold” as mentioned by Mnuchin, US Treasury Secretary, overall eases the demand for the precious metal as the news is seen as risk-on by markets.
The next catalyst for gold and USD alike can be with the FOMC’s minutes release on Wednesday at 18:00 GMT. Traders will be on the lookout to know if the inflation and growth outlook are on track. Market participants are expecting the Federal Reserve Bank to raise three to four times in 2018. Therefore, traders are buying USD in order to take advantage of the interest rates it yields. On the other hand, gold is a non-yielding safe-haven asset.
Gold 4-hour chart
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The main trend is bearish as the market is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart. Supports are seen at the 1290.00 handle, 1281.70 swing low and at 1270.00 figure while resistances are seen at 1296.92 swing high and at the 1300.00 figure.
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