Gold stalled its intraday decline just ahead of the $1,770 area and edged higher during the Asian session on Tuesday. Any meaningful upside, however, seems elusive ahead of the FOMC minutes on Wednesday, FXStreet’s Haresh Menghani reports.

Limited upside potential for XAU/USD ahead of FOMC minutes

“The markets are currently pricing in a greater chance of at least a 50 bps rate hike at the September FOMC meeting. Hence, the minutes would be looked upon for clues about the possibility for a larger 75 bps move. This would play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the non-yielding gold.” 

“Repeated failures to find acceptance above the $1,800 mark warrants some caution for bullish traders. Any further move up, however, might now confront resistance near the $1,788-$1,789 region. This is followed by the aforementioned handle and last week's swing high, around the $1,808 area. Some follow-through buying would mark a breakout and lift gold towards the next relevant hurdle near the $1,824-$1,825 region.”

“The overnight swing low, around the $1,772 area now seems to protect the immediate downside. Sustained weakness below would expose the $1,754-$1,752 strong resistance breakpoint, now turned support. A convincing breakthrough the latter would shift the bias in favour of bearish traders and drag gold towards the $1,728 intermediate support en route to the $1,715 zone.”