- Gold receives new demand near the $1660 support zone, amid dollar stabilization.
- Bets on more aggressive Fed rate hikes continue to play against gold.
- Traders await US inflation data and Fed minutes.
The Prayed It attracts fresh buying near the $1,660 support zone on Wednesday and breaks a five-day losing streak, recovering from one-week lows. XAU/USD maintains its modest intraday gains in the $1,670 area, after rallies stalled below $1,675.
The US dollar consolidates its recent gains, with a small setback. Operators are waiting US inflation data The Producer Price Index will be published on Wednesday and the Consumer Price Index on Thursday. Also keep an eye out for the minutes from the latest FOMC meeting due to be released in the second half of today’s American session.
The moderation in the price of the dollar offers some support to gold denominated in dollars. However, expectations of the Fed remain a tailwind for the dollar and limit significant gains for the yellow metal. This as long as it continues to boost Treasury yields. These are rising modestly today, but are not weighing on gold.
XAU/USD rallies have so far stopped at $1675. Between that level and $1,680 there is a significant resistance zone that, if left behind, could enable further upside. The next barrier is seen around $1692. In the opposite direction, the area around $1660 has become a critical support level which if broken would leave gold vulnerable with a possible target of $1645.
Technical levels
Source: Fx Street
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