- Gold remains trapped within a narrow range below the $ 1,740-42 high resistance zone.
- Investors now appear reluctant as the focus remains on the FOMC’s monetary policy decision.
- Mixed oscillators on hourly and daily charts warrant caution before opening directional positions.
Gold is extending its lateral consolidation price action and remains trapped within a tight range, above the $ 1,730 level, during the European session on Wednesday. Investors seem reluctant to open aggressive positions and prefer to wait on the sidelines before the FOMC’s monetary policy decision.
From a technical perspective, the XAU / USD has been struggling to capitalize on its recent rally from multi-month lows and the rally has remained limited near the $ 1,740-42 resistance zone. The mentioned region coincides with a descending trend line of more than a month and should now act as a key point for short-term investors.
Meanwhile, the technical indicators on the 1 hour chart have gained positive momentum and support the prospects for some intraday gains. That being said, the oscillators on the daily chart, although they have been recovering from negative territory, have yet to confirm a bullish bias, which warrants caution before positioning for any significant rally.
This, in turn, makes it prudent to wait for a sustained break above the $ 1,740-42 confluence barrier to confirm that XAU / USD has bottomed out in the near term. Some continuation buying will set the stage for a move to challenge a strong horizontal support break point, now turned into resistance near the $ 1,760-65 region.
On the other hand, immediate support is in the region of $ 1,725-24, where the 100 hourly SMA is located. This is followed by an ascending trend line of more than a week, around the $ 1,718 region and the $ 1,700 round level. A convincing break below will be seen as a new trigger for the bears and will make the XAU / USD vulnerable to further decline.
The next relevant target on the downside will be multi-month lows, around the $ 1,677-76 region, below which XAU / USD is likely to further accelerate the decline. The downward trajectory could drag gold towards the $ 1,625-20 region with some intermediate support near the $ 1,660-50 area.
4 hour chart gold
Gold technical levels
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