Technical Analysis:
Currently trading around 2361, we have got a structure shift of gold in 4H tf. Gold is retracing towards 2380-2390 zone and from there we might get selling opportunity with the confirmation of 25-5min tf.Yesterday we saw huge candles for coming in selling side that show sellers are showing interest in gold.
Fundamentals:
Gold extends declines on hawkish Fed minutes.
While the policy response for now would "involve maintaining" interest rates at current levels, minutes of the Fed's latest meeting released on Wednesday also reflected discussions of possible hikes.
"Gold did take a bruising after the Fed minutes reminded investors that interest rate cuts are far from imminent," said Tim Waterer, chief market analyst at KCM Trade.
Bullion is considered an inflation hedge, but higher rates increase the opportunity cost of holding the non-yielding asset.
"There is a chance gold could drift back to support levels around the $2,355 region if the dollar keeps the upward momentum going," Waterer said.
The medium to longer-term outlook still looks constructive for gold, but that is very much predicated on the next rate move being lower and not higher from the Fed
Disclaimer: Trading carries risk. Practice effective risk management and consider your risk tolerance before trading.
