Gold Price Analysis: The $1744-45 confluence region to cap any XAU/USD further rise

Gold edged higher for the third consecutive session on Tuesday, albeit lacked any follow-through buying and remained below the $1740 supply zone. According to FXStreet’s Haresh Menghani, the $1744-46 confluence is likely to cap gains for XAU/USD ahead of the FOMC meeting.

Key quotes

“The FOMC policy decision, scheduled to be announced on Wednesday, will play a key role in influencing the non-yielding yellow metal and assist investors to determine the next leg of a directional move.”

“Tuesday's US economic docket – highlighting the release of monthly Retail Sales – will be looked upon for some impetus. This, along with the US bond yields, will influence the USD price dynamics.”

“Any further positive move is likely to confront stiff resistance near the $1744-45 confluence region. This comprises a one-month-old descending trend-line and the 38.2% Fibonacci level of the $1855-$1676 downfall. A convincing breakthrough the mentioned barrier might trigger a short-covering move and push the XAU/USD back towards the $1765 strong horizontal support breakpoint.”

“Immediate support is pegged near the 23.6% Fibo. level, around the $1722-19 region ahead of the $1700 round-figure mark. Failure to defend the mentioned support levels will negate prospects for any further near-term recovery and turn the commodity vulnerable to retest multi-month lows, around the $1677-76 region.”