XAU/USD Outlook: Gold Extends Gains into Sixth Straight Day, Awaits Fed Minutes for Fresh Signals

Technical analysis of Forex market

Spot gold maintains a firm tone and is on course for a sixth straight day in green, as Tuesday’s upside rejection at pivotal Fibo barrier at $1813 (38.2% of $1916/$1750) failed to negatively impact bulls, which regained traction and pressure again $1813 level.

The yellow metal was lifted mainly by a drop in US Treasury yields, but all eyes are on release of Fed’s minutes of the June policy meeting, which could provide more clues on the central bank’s policy stance and define metal’s price direction.

Although gold price accelerated higher in July, the recovery is still slow, compared to June’s over 7% monthly fall, sparked by hawkish signal from Fed.

This keeps the downside vulnerable, especially if bulls repeatedly fail to clear $1813 pivot.

Investors look for more details of Fed’s interest rate trajectory and QE tapering, with minutes seen as one of key factors to define gold’s near-term direction.

Hawkish tone from the central bank would hurt demand for the precious metal and push the price back below pivotal supports at $1800/$1790 (psychological/daily cloud base /100DMA) that would signal an end of recovery and shift focus lower.

Conversely, Fed’s dovish stance would increase uncertainty and boost demand for safe-haven gold, which could push the price towards targets at $1828/33 (converged 55/200DMA’s/ Fibo 50% of $1916/$1750).

Res: 1813; 1828; 1833; 1852.
Sup: 1800; 1790; 1782; 1765.