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- Gold price is consolidating the Tuesday turnaround early Wednesday.
- US Dollar, Treasury bond yields keep the red amid Chinese stimulus optimism.
- Daily technical setup points to range trade for Gold price at around $2,030.
Gold price is consolidating the solid rebound from the weekly low of $2,015 early Wednesday. The US Dollar (USD) extends its pullback from multi-month highs, in the wake of retreating US Treasury bond yields and a risk-friendly market environment, motivating Gold buyers to gather pace before the next push higher.
Gold buyers pause ahead of more Fedspeak
Risk sentiment remains in a sweeter spot so far this Wednesday’s trading, as investors cheer a raft of measures by the Chinese regulator to support share prices after the market plunged to five-year lows.
Markets are paying limited attention to the reduced bets for aggressive rate cuts from the US Federal Reserve (Fed) coupled with strong US economic data and hawkish Fedspeak, as the US Dollar is bearing the brunt of the broader market optimism and negative US Treasury bond yields.
The US Treasury bond yields are extending their pullback, as markets anticipate a big auction of the US 10-year Treasury bonds later on Wednesday. These factors are helping Gold price stay afloat.
Amid a lack of top-tier economic data releases from the United States (US), the focus will continue to remain on the Fedspeak, sentiment on Wall Street and developments in the Chinese markets. Traders look forward to Chinese inflation data due this Thursday for fresh signs on the state of the economy. Fed policymakers Barkin, Bowman and Kugler are expected to speak in the latter part of the day.
On Tuesday, Philadelphia Fed President Patrick Harker said that the “economy is on track for a soft landing.”
Markets are currently pricing in a roughly 20% chance of a cut in March, the CME Group’s FedWatch Tool shows, compared with a 68.1% probability at the start of the year. Meanwhile, the odds for a May Fed rate cut now stand at 65%.
Gold price technical analysis: Daily chart
As observed on the daily chart, Gold price has been struggling around the $2,030-$2,035 region. That level is the confluence of the 21-day and 50-day Simple Moving Averages (SMA).
The 14-day Relative Strength Index (RSI) is trading neutral at the 50 level, suggesting a lack of clear directional bias for Gold price.
If the rebound finds legs, the immediate powerful resistance for Gold price is seen at the $2,050 psychological level. The next critical supply zone for the bright metal is seen at around $2,065.
On the downside, Gold sellers need to seek a decisive close below the abovementioned $2,035-$2,030 area. Further down, a test of the $2,000 threshold if the $2,010 round figure gives way.
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