Gold At Key Support Ahead of FOMC Minutes

USD Rally Weighs on GoldGold prices have been drifting lower over recent weeks amidst the fresh uptick we’ve seen in USD. With traders now growing more uncertain over the projected US rate path in coming months, USD has made a comeback with pricing reflecting a higher likelihood of a further hike from the Fed. However, the decline in gold has been a little weak momentum wise, suggesting the move is merely a rotational correction rather than a trend reversal.Upside Risks for GoldLooking ahead, there are clear upside risks to note in gold. On the one hand, we’re seeing a broad risk off move currently which should help underpin gold via safe-haven inflows. The backdrop in China is deteriorating rapidly with fresh warning signs in the financial and property sectors alongside key indicators trending lower. Additionally, given the more mixed outlook with regard to the Fed currently, if the Fed holds off form hiking again in September or weaker US data sees the market scaling back its hawkish expectations, this should see USD coming under pressure near-term supporting gold.FOMC Minutes on WatchThe latest set of FOMC meeting minutes later today will be closely watched by the market. Given the split sentiments we’ve heard from Fed officials recently, traders will be keen to see if the minutes shed more light on how likely the bank is to hike again next month.Technical ViewsGoldThe sell off in gold from the 1973.51 level has seen the market breaking down through the rising trend line (sloping head and shoulders neckline) from YTD lows. The market is currently stalled on support at the 1905.46 level. This is a major area for gold and bulls need to defend this to keep the longer term bull view intact. Below here, focus shifts to 1871.04 next and 1805.18 below. Notably, we have an active buy signal in XAUUSD in the Signal Centre today set a little below market at 1912 targeting a move back up to 1941.