The gold price (XAU/USD) witnessed renewed interest during the Asian session on Wednesday, aiming to extend the rebound from the previous day’s support zone of $2,319-2,318. Currently positioned near the upper boundary of a short-term trading range maintained over the past week, bullish traders are cautiously awaiting a decisive move beyond the pivotal resistance marked by the 50-day Simple Moving Average (SMA) before committing to new positions.
Federal Reserve (Fed) Chair Jerome Powell’s dovish comments on Tuesday have reinforced expectations that the US central bank may commence its rate-cutting cycle at the September meeting. Additionally, ongoing concerns over global economic growth slowdown, persistent geopolitical tensions, and political uncertainty in both the US and Europe are providing tailwinds for the precious metal.
Despite the positive outlook, the gold price’s upside potential appears constrained as traders may adopt a cautious stance, awaiting clearer signals regarding the Fed’s future policy decisions. Consequently, attention will be focused on the release of the FOMC meeting minutes later in the US session, which are expected to influence the near-term dynamics of the US Dollar (USD) and provide fresh directional impetus for gold.
Meanwhile, traders will also monitor the US economic docket, which includes the ADP report on private-sector employment and the ISM Services PMI. Given the current fundamental backdrop, the path of least resistance for XAU/USD seems to be upward, with any significant corrective dips likely viewed as buying opportunities.
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