Gold prices struggle for direction this week, staying confined in a narrow band below the key daily moving averages that have been capping gains for over a month already. The precious metal came off daily lows to settle around the flat line as the New York session began, with prices struggling to regain at least the $1,850 intermediate barrier.
The bullion refrains from a more decisive recovery attempt even as the dollar retreats nearly across the market, suggesting gold will continue to stay indecisive inside a familiar trading range in the near term. On the upside, the XAU/USD pair needs to overcome the 200- and 20-DMAs, arriving at $1,842 and $1,846, respectively, to retarget the $1,900 zone eventually.
However, the path of least resistance remains to the downside for the time being, as the non-yielding metal could come under renewed selling pressure once the demand for the greenback reemerges. By the way, the DXY bounced off local lows seen below 104.00 earlier today to trim intraday losses in recent trading. In turn, dip-buying suggests that the US currency remains resilient, with bearish risks limited.
XAU/USD needs to make a decisive break above the 100-week SMA today at $1,843 to shrug off the current weakness and switch focus back to the 20-week SMA that lies just below the $1,900 mentioned barrier last seen in early May. Still, the precious metal will likely struggle to get back to this level soon under the weight of a hawkish Federal Reserve that will continue to underpin the dollar.