Gold Regains Positive Traction After Tuesday's Over 2% Slump As Traders Await FOMC Minutes

Gold (XAU/USD) gains some positive traction during the Asian session on Wednesday and recovers a part of the previous day's heavy losses more than 2%, to the $4,843-4,842 region or a nearly two-week low. The intraday move higher could be attributed to repositioning trade ahead of the release of the FOMC Minutes. Investors will look for more cues about the US Federal Reserve's (Fed) rate-cut path, which will play a key role in influencing the near-term US Dollar (USD) price dynamics and providing a fresh directional impetus to the non-yielding yellow metal.

In the meantime, Chicago Fed Austan Goolsbee said on Tuesday that there are potentially several more interest rate cuts this year if inflation resumes a decline to the 2% target. This comes on top of softer US consumer inflation figures released last Friday and reaffirmed bets that the US central bank will lower borrowing costs in June and deliver two more rate cuts in 2026. This, in turn, helps revive demand for the Gold. Despite the dovish outlook, the USD sticks to a mild positive bias, which, along with easing geopolitical tensions, could cap the safe-haven commodity.

Discussions between the US and Iran kicked off, and both sides reached an understanding on the main “guiding principles” during the second round of nuclear talks in Geneva, easing concerns about a military confrontation. Meanwhile, the tri-lateral meeting between the US, Russia, and Ukraine, peace talks were moved to Wednesday. Nevertheless, the optimism remains supportive of a generally positive tone around the equity markets and makes it prudent to wait for strong follow-through buying before positioning for any further appreciating move for the XAU/USD pair.

Looking ahead, US markets will focus on housing data, remarks from Fed officials, GDP figures for Q4 2025, and the release of the Fed’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) Price Index.

XAU/USD 4-hour chart

Gold bounces off 200-period SMA on H4; not out of the woods yet

The commodity finds decent support and rebounds from the 200-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, the Gold holds above the steadily rising SMA, maintaining a broader upside bias. The average provides dynamic support at $4,833.48. Despite the supportive long-term slope, momentum needs confirmation before a sustained rebound takes shape.

The Moving Average Convergence Divergence (MACD) line remains below the Signal line and under the zero mark, while the negative histogram has begun to contract, hinting at easing bearish momentum. The Relative Strength Index stands at 43.46, below the 50 midline and pointing to restrained buying pressure.

A rebound from the rising SMA would keep the trend profile intact, whereas a close below that gauge would expose further downside. Additional narrowing of the MACD histogram and a bullish crossover above the Signal line would strengthen recovery prospects. A push in the RSI through 50 would improve the near-term tone and could allow buyers to re-engage.