Daily Analysis XAUUSD - 24 May 2023

The recent hawkish comments from multiple Federal Reserve (Fed) officials have raised the possibility of additional interest rate hikes. This development has presented a significant challenge for the non-yielding gold price. Consequently, investors' attention will remain focused on the upcoming release of the Federal Open Market Committee (FOMC) meeting minutes today. Investors will carefully analyze the minutes for any indications about the future trajectory of interest rate hikes, as it will significantly impact the short-term dynamics of the US Dollar (USD) and generate new momentum for XAU/USD (gold).

Negotiations between President Joe Biden's representatives and congressional Republicans failed to reach an agreement on Tuesday to raise the government's borrowing limit of $31.4 trillion. This situation has sparked fears of an unprecedented US debt default and dampened investor sentiment. Additionally, the looming risks of a recession may further discourage bearish speculations on XAU/USD from being excessively aggressive.

Taking a technical analysis perspective, gold recently formed a double bottom pattern, pushing the price to reach the 1980 level. Whether we witness a potential reversal or a continuation towards the selling zone will likely depend more on fundamental factors rather than technical indicators currently, as the price action appears to be awaiting the outcome of the anticipated meeting. It is crucial to monitor the next support level, which is around the 100-day Moving Average (MA) and the downward parallel of the bullish trend line, estimated to be around 1935. Additionally, a significant resistance point is expected near the confluence point around 2000.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
2020	2000	1982	1973	1950	1937