Gold prices retain a modest bullish bias, looking resilient after an ascent witnessed on Tuesday. The bullion seems to have partially shrugged off the recent bearish pressure, with $2,300 representing the intermediate significant support on the way to local lows.
Now, the XAUUSD pair needs some momentum to make a more decisive bounce, with prices struggling to attract more decisive demand so far today. The downside potential looks limited at this stage, however, as the dollar looks steady these days.
The US currency finished unchanged overnight, staying unbiased today, with volatility ebbing these days. Late last week, the greenback briefly rallied to early-May highs in the 105.80 area due to a relatively hawkish tone from the Fed before retreating partially amid some profit-taking.
Indecisive dollar helps
This week, the dollar has settled above the 105.00 figure, struggling for direction after a slide witnessed at the start of the week. During the previous session, the dollar extended losses towards the 105.13 zone before bouncing marginally. The USD index turned slightly bullish in recent trading, but lacks the momentum so far, thus fueling some demand surrounding the yellow metal.
On the weekly timeframes, the technical picture has barely changed, with wider picture remaining upbeat after reaching fresh all-time highs. On the upside, the immediate significant target is now represented by the $2,350 zone, followed by the $2,360 region that capped gains last week. Downside risks look limited while above the $2,300 figure.
In the medium term, gold will continue to take clues from speculations surrounding the Fed policy outlook, with rate cut expectations keeping the bullion afloat. Of note, slowing US retail sales bolstered rate cut chances, adding to upbeat tone surrounding gold.