Gold erases its Asian session's gains but holds above previous session's low

Gold oscillated between mild gains and losses on Wednesday, slipping after reaching the intraday high of $3372. Prices remain well supported by a confluence of fundamental factors. Tensions between USA and China remains unresolved, with no signs of truce, due to mutual accusations of breaching the trade agreement, causing investors to flock towards the safe-haven asset.

Despite upbeat economic data, the US Dollar came under pressure due to falling Treasury yields and growing expectations that the Federal Reserve will implement at least two 25 basis point rate cuts by year-end. Additionally, concerns over a rapidly worsening US budget deficit, fueled by President Trump’s tax and spending bill, further weighed on the Greenback, providing support to the yellow metal. 

XAU/USD TECHNICAL OVERVIEW 

Technical Structure: Gold shows mixed signals across multiple timeframes, indicating indecision in the market. On the daily chart, a Hanging Man candlestick suggests potential exhaustion of the recent bullish momentum. The 4-hour chart displays a Doji, reinforcing uncertainty. On the 1-hour chart, the presence of Three Black Crows signals short-term bearish pressure.

Intraday Trend/ Intraday Strategy: The intraday bias lacks direction, remaining neutral and favours the strategy of Buying on Supports and Selling on Resistance.

Weekly Trend: Neutral

Major Support: 3346, 3333, 3325
Major Resistance: 3365, 3372, 3392