FX.co ★ Blackpink | XAU/USD, GOLD

Gold (XAU/USD) is seen as under pressure ahead of Tuesday’s opening of the European trading day, with the bears hoping to push the metal lower below the $4,000 level due to an overall stronger USD. On the other hand, gold is trading above its three-month lows registered earlier this Monday, as the market participants remain cautious about taking any new positions before the two-day FOMC rate decision meeting. Recently, members of the Federal Reserve have hinted that they do not see any need for haste regarding rate hikes. On the contrary, market participants are currently factoring in the likelihood of more than 80% that the US central bank hikes its rates during its December meeting. It is, in fact, the fears about inflation due to the high cost of energy that make future tightening possible. Thus, all the attention will be paid to the statement following the meeting and to remarks of the head of the Federal Reserve, Kevin Warsh. In addition, the publication of the Advance US Q3 GDP and the Personal Consumption Expenditures (PCE) Price Index may serve as additional sources of information regarding the potential path of further monetary policy by the Federal Reserve. The latter will have a significant effect on the dynamics of the US Dollar (USD) prices and offer some meaningful impulse to non-yielding Gold. Ahead of the major central bank event and data releases, the partial recovery in US Treasury yields, after the recent decline to three-week lows, alongside tensions in the Middle East, supports the safe-haven US currency. Geopolitical risks remain alive amid unsuccessful US-Iran negotiations and fresh attacks on Saudi Arabia by Iranian proxy militias known as Houthis. It is worth mentioning that the Houthis have attacked pumping stations and Riyadh Airport in Saudi Arabia. On top of that, Hezbollah armed group of Lebanon is reported to prepare for the possible renewal of conflict with Israel, reducing hopes for the region stability in the nearest time. All of the above-listed information points to the upside for the USD and implies that the lowest-risk path for gold is to the downside. The gold metal remains in a negative outlook on the back of its fall out of a short-term trading range. In addition, the valuable metal trades below the 200-period Simple Moving Average (SMA) on the four-hour chart at $4,198.08, which is currently serving as the main cap for the price. As far as technical tools go, the MACD line stands above zero and is rising, and the RSI is recovering towards the upper 30s. The mild uptick in momentum gauges reflects a possible corrective bounce. However, it will take a break below $4,000 in order to confirm further losses. From the resistance point of view, the first level is set at the breakout of the trading range in the $4,065-$4,075 area. This will be followed by the $4,100 price level, breaking out of which XAU/USD could try to test the 200-period SMA as well as revisit the $4,200 handle.