Gold Price Analysis: XAU/USD remains depressed near $1940 level ahead of Powell’s speech

• Gold edged lower on Thursday and eroded a part of the previous day’s goodish move up.
• The near-term technical set-up seems tilted in favour of bulls, albeit warrant some caution.
• The Fed Chair Jerome Powell’s speech will help determine the next leg of a directional move.

Gold failed to capitalize on the previous day's goodish bounce from the $1900 neighbourhood, or two-week lows and traded with a negative bias through the mid-European session on Thursday.

Looking at the technical picture, the commodity on Wednesday rebounded swiftly from a near two-month-old ascending trend-line support. This coupled with the fact that the yellow metal has been showing some resilience below the 200-period SMA on the 4-hourly chart favours bullish traders.

However, bulls have been struggling to make it through the $1955-60 supply zone. Moreover, neutral technical indicators on hourly/daily charts haven't been supportive of any firm near-term direction. This, in turn, warrants some caution before positioning for any meaningful positive move.

Market participants eagerly await the Fed Chair Jerome Powell's speech at the Jackson Hole Symposium later this Thursday. Powell's comments will be closely scrutinized for guidance about the US economic recovery and hints that the central bank might tweak its policy framework to push up inflation.

Hence, it will be prudent to wait for a sustained strength beyond the mentioned barrier, above which the non-yielding yellow metal could move back to the $1977-80 intermediate resistance. Dovish Fed signals might further assist bulls to aim back to reclaim the key $2000 psychological mark.

On the flip side, the $1930-25 region might continue to protect the immediate downside and is followed by the trend-line support, around the $1900 mark. Failure to defend the mentioned support levels pave the way for an extension of the recent corrective slide from record highs, set on August 7.

Gold 4-hourly chart

Technical levels to watch