Gold prices are holding relatively steady as compared with the overall volatility in the global financial markets amid rising tensions surrounding Ukraine. The precious metal is holding above the $1,830 area these days, lacking the upside momentum to challenge last week’s highs marginally below the $1,850 figure.
Earlier on Tuesday, the XAU/USD pair briefly slipped but attracted dip buyers that have brought the prices back above $1,840. However, it looks like the downside pressure could reemerge in the short term as the dollar stays elevated amid the dominating safe-haven demand. The USD index is now back above 96.00, holding just shy of the 96.30 zone that triggered a sell-off at the end of the first trading week of 2022.
Furthermore, the recent ascent could attract sellers on Wednesday should the Federal Reserve express a more hawkish tone than expected following its two-day meeting. If Powell reveals that FOMC members have discussed the possibility of a 50 bps hike in March, the dollar-denominated commodity would have to give up recent gains amid the resurgent US Treasury yields. In other words, the outcome of the Fed meeting would be a good opportunity for sellers.
In this scenario, the $1,830 zone will focus, as a break below this support would pave the way towards the 20-DMA, currently at $1,818, followed by the 200-DMA that arrives at around $1,805. The critical level on the downside is represented by the $1,800 level that will stay intact should the mentioned moving averages trigger a bounce. In the broader picture, the yellow metal keeps trending north from December lows in the $ 1753 region.