Gold (XAU/USD) traded moderately higher on Wednesday, returning toward the $4,370 area after finding support near $4,300 during the previous session.
A broad-based decline in the U.S. dollar, along with lower Treasury yields ahead of the release of the Federal Reserve’s July monetary policy meeting minutes, provided support for precious metals.
However, technical indicators suggest that bullish momentum may be losing strength.
Oil Prices and Yields Pressure Gold’s Advance
Analysts at OCBC noted that gold’s recent rebound has lost momentum as rising oil prices and higher long-term U.S. yields have created additional pressure on the metal.
The bank said that for gold’s rally to regain strength, oil prices and yields would need to stabilize, or investment demand would need to increase further.
Near-term gold performance is expected to depend on inflation-related factors and investor demand for safe-haven assets.
Technical Indicators Signal Slowing Momentum
XAU/USD traded around $4,367 after rebounding from $4,324. However, Tuesday’s bearish engulfing candle on the daily chart signals potential downside risk and a possible shift in short-term momentum.
Momentum indicators remain in positive territory but are showing signs of weakening. The Relative Strength Index (RSI) has moved below 60, while the Moving Average Convergence Divergence (MACD) histogram shows contracting bars.
Key Gold Price Levels to Watch
On the downside, immediate support is located at the August 14 low near $4,311. A broader support zone follows around $4,220, which aligns with the June 22 high and August 6 low.
On the upside, attempts to continue higher may face resistance between the top of the past two weeks’ trading range near $4,450 and the 200-day Simple Moving Average (SMA) around $4,510.
A break above that level could open the way toward the late May highs near $4,600.
