The precious metal struggles after a rejection from the $1,865 local resistance
The price of gold stays elevated after a solid bullish gap seen at the start of the week amid the Israel-Hamas conflict. After the initial jump, however, the precious metal retreated marginally as risk sentiment has improved, suggesting the market had already assessed the impact of Hamas’ attack over the weekend.
Investor sentiment was bolstered by the Federal Reserve’s dovish comments. Top Fed officials suggested that the rising Treasury yields could deter the Fed from further rate hikes. There are also a number of Fed officials due to speak later today. On Wednesday, markets will focus on the release of the minutes of the September monetary policy meeting.
Should the central bank refrain from hawkish signals, the dollar will suffer deeper losses, which implies that gold may see some gains in the days to come. The USD index retreated towards the 106.00 zone that has been acting as support so far. A failure to hold above this level in the near term would pave the way to deeper losses.
The XAUUSD pair has settled above the $1,850 zone, struggling after a rejection from the $1,865 local resistance. The bullion has turned negative on the day since then, with buyers looking indecisive ahead of major events in the United States.
In a wider picture, gold is yet to regain the key SMAs along with the $1,900 psychological level last seen in late September. The initial significant barrier now arrives around $1,880, where the descending 20-DMA lies. Once above, gold would retarget the mentioned hurdle.
On the downside, the $1,845 zone remains in the market focus. A failure to hold above this level would pave the way towards the $1,830 region, followed by last week’s lows seen around $1,810.