Gold Price Analysis: XAU/USD consolidates in a range below $1,750 level

• Gold was seen oscillating in a range through the first half of the trading action on Wednesday.
• A generally positive tone around the equity markets capped gains for the safe-haven XAU/USD.
• Retreating US bond yields undermined the USD and extended some support to the commodity.

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses during the Asian session on Wednesday. The commodity was last seen trading around the $1,746-47 region, nearly unchanged for the day.

The precious metal struggled to capitalize on the previous day’s solid rebound from the $1,723 area, or over one-week lows and witnessed a subdued/range-bound price action on Wednesday. A generally positive tone around the equity markets was seen as a key factor capping gains for the safe-haven XAU/USD. The downside, however, remains cushioned amid the prevalent US dollar selling bias, which tends to benefit the dollar-denominated commodity.

The USD came under some heavy selling pressure after the latest US consumer inflation figures failed to provide any evidence of broadening price pressures. The data reinforced the Fed’s outlook that higher inflation in coming months will be transitory. This, in turn, triggered a fresh leg down in the US Treasury bond yields and weighed on the USD.

In fact, the yield on the benchmark 10-year US government bond dropped to 1.62%, which was seen as another factor lending some support to the non-yielding yellow metal. That said, the lack of any strong follow-through buying around the XAU/USD warrants some caution for bullish traders and before positioning for any further near-term appreciating move.

There isn’t any major market-moving economic data due for release from the US on Wednesday. Hence, the key focus will remain on Fed Chair Jerome Powell’s scheduled speech later during the US session. This, along with the broader market risk sentiment, the USD price dynamics and the US bond yields might produce some trading opportunities around the XAU/USD.

Technical levels to watch