Gold prices edged higher on Wednesday after recovering from a near one-week low as investors awaited the release of the US Federal Reserve’s June meeting minutes, while RHB Investment Bank Bhd (RHB Research) maintained its bearish technical outlook on COMEX gold and advised traders to keep short positions.
Spot gold rose 0.4% to US$4,123.55 per ounce after earlier falling to its lowest level since July 2. However, US August gold futures slipped 0.5% to US$4,135.
Investor sentiment remained cautious as renewed tensions in the Middle East capped gains in the precious metal. Iran’s Revolutionary Guards said they had targeted US military sites in Bahrain and Kuwait following US strikes on Iran, lifting oil prices by more than 3% and pushing the US dollar to its strongest level in a week.
Higher Treasury yields and expectations of tighter US monetary policy also weighed on bullion. Markets are now pricing in more than a 63% probability of a Federal Reserve interest rate hike in September, up from around 57% a day earlier, according to the CME FedWatch Tool.
Investors are also awaiting the minutes from the Federal Open Market Committee’s June 16-17 meeting for further clues on the direction of US interest rates.
Separately, RHB Research said COMEX gold remained on a bearish trajectory after the metal closed US$10.10 lower at US$4,157.40 on Tuesday, facing resistance at its 20-day simple moving average.
The research house said the latest price action suggested the recent rebound was losing momentum, with the relative strength index slipping below the 50% level, indicating bearish momentum remained intact.
RHB Research expects COMEX gold to resume its decline towards the US$4,000 support level and recommended maintaining short positions initiated at US$4,605.70, with a stop-loss set at US$4,400. It identified immediate support at US$4,000 followed by US$3,700, while resistance stands at US$4,400 and US$4,650.
