Gold bulls capped below $4,220

Gold keeps trading in a choppy and volatile manner, with XAUUSD moving roughly within a $40 range, both sides of the $4,200 line on Tuesday.

The long wicks on the daily chart candles highlight the hesitant market as investors await Wednesday’s Federal Reserve decision for further insight about the near-term interest rate path.

Investors have already priced in a 25 basis point rate cut on Wednesday, and the focus now is on the interest rate projections, the so-called “Dot-Plot”, and Chairman Jerome Powell’s conference.

The market consensus is leaning toward a hawkish message, following the rate cut, which has been pushing US Treasury yields higher over the last few days, providing some support to the dollar and weighing on precious metals.

Recent price action shows a consolidation pattern around the $4,200 level. Technical indicators show no clear bias.

The yellow metal has significant support at the $4,165 area (December 2 low), although bulls are running out of steam ahead of Monday’s highs, at $4,220. This level needs to give way to expose the $4,265 area, where gold was capped on December 1 and 5.

XAUUSD charts by TradingView