Gold trades in lower-half of weekly range near $1325
- US Dollar Index stays calm near 96 on Wednesday.
- Wall Street looks to open the day modestly lower.
- Coming up: FOMC Chair Powell testimony day 2.
After closing the previous day with small gains near $1330, the XAU/USD pair struggled to build on its gains and fell toward the lower-end of its weekly range. As of writing, the pair was trading at $1325.2, losing 0.3% on a daily basis.
Following the decisive rally that lost its momentum ahead of $1350 on February 20, the precious metal has been having a difficult time finding demand. In addition to the pair becoming technically overbought, hopes of the trade conflict between the U.S. and China coming to an end and allowed investors to move away from the safe-haven gold.
Nevertheless, with the greenback underperforming since last Friday, the pair's losses stay limited. Before FOMC Chairman Jerome Powell, who yesterday reaffirmed the Fed's patient stance with regards to rate hikes, speaks in the second day of his testimony before the Congress, the US Dollar Index is down 0.04% on the day at 96.
Meanwhile, markets will be paying close attention to India-Pakistan conflict and signs of a further escalation of the tension could trigger a flight-to-safety and help gold recover its losses.
Technical levels to consider
The pair could face the initial support at $1320 (20-DMA) ahead of $1311 (Feb. 15 low) and $1305 (50-DMA). On the upside, resistances could be seen at $1330 (daily high), $1341 (Feb. 21 high) and $1347 (Feb. 20 high). In the meantime, the CCI indicator on the daily chart is now near 0, suggesting that the pair is likely to keep its neutral tone in the near term.