Gold stays directionless below $1220, Fed Chairman Powell speech eyed

• Wall Street erases part of early gains.
• US Dollar Index stays in the positive territory near 97.50.

Since breaking below $1220 on Tuesday, the XAU/USD pair is struggling to find its next short-term direction. As of writing, the pair was virtually unchanged on the day near $1215.

Although the improved market sentiment and a stronger greenback dragged the pair down to $1211 area in the early NA session, the pair’s losses stayed limited as Wall Street’s failure to push higher following a positive start to the day suggests that investors are not yet eager to move away from safer assets like the precious metal. Nonetheless, ahead of FOMC Chairman Powell speech, all three major equity indexes in the U.S. stay in the positive territory and a fresh buying wave in the second half of the session could weigh on gold.

On the other hand, on the back of the upbeat GDP data from the United States, the US Dollar Index touched its highest level in two weeks above the 97.50 mark. However, a technical correction pulled the index back below that level and helped the pair retrace its drop. At the moment, the DXY is up 0.08% on the day at 97.45.

• US:  Real GDP growth  in Q3 (second estimate) stays unchanged at 3.5% as expected.
• US:  International trade deficit  rose to $77.2 billion in October from $76.3 billion in September.

Technical levels to consider

The initial resistance for the pair aligns at $1218 (50-DMA) ahead of $1228 (Nov. 26 high) and $1237 (Nov. 1 high). On the downside, supports are located at $1211 (daily low), $1206 (Nov. 9 low) and $1200 (psychological level).