In the American session, Gold (XAU/USD) is trading at 1,925 above the 200 EMA and above the 21 SMA. Since March 24, gold has been oscillating within a falling wedge technical pattern.
XAU/USD has been trapped around 1,937-1,914 for almost a week, unable to break above 1,945. This consolidation movement is part of the formation of the technical pattern that is developing.
The rise in Treasury bond yields continues to weigh on gold. The 10-year rate is at 2.66%, a new high in years and the 30-year rate is at 2.67%, the highest level since May 2019. This rise in yields affects negatively gold and prevents it breaking the barrier of 1,947.
The key event of the day will be in the afternoon of the American session, with the publication of the minutes of the last FOMC meeting, which is expected to give clues about the increase in the interest rate in the coming months.
A sharp break below 1,914 will enable a sharp drop for gold, with a possible initial target in the zone of 1,900. Below this level, a drop is expected to level of 6/8 Murray at 1,875.
The 4-hour chart shows that the price is oscillating between the two moving averages of 21 and 200. The eagle indicator is moving slightly lower below a descending channel. The break of this channel could be a signal to a bullish movement in gold.
Our trading plan is to buy gold as long as it remains trading within the falling wedge pattern and above 1,923-1,927 with targets at 1,937 and 1,966.
Market sentiment remains very cautious. Traders will be waiting for the Fed's minutes to be released in the next few hours in order to define the gold trend.
