As global markets battle for clear directions to extend the previous optimism, gold (XAU/USD) prices drop from intraday highs, being range-bound near $1,813-18. During a sluggish Asian session on Wednesday, the precious metal maintained its previous dayís fall from the 200-DMA.

The current Fed speak is more hawkish than previous ones, but reports about the EUís oil ban on Russian imports, as well as Chinaís COVID restrictions, put optimists to the test. Despite this, traders remain optimistic due to stronger GDP data from Japan and the Euro zone, buoyant Retail Sales from the US, and the UKís robust jobs report.

ďThe Fed should boost rates to 2.25 percent -2.5 percent neutral ranges Ďexpeditiously,'Ē Fed policymaker Evans seems to have weighed on the marketís mood by raising fears of a fast rate hike. Fed Chair Jerome Powell and normally hawkish St Louis Fed President James Bullard argued for a 50 basis point rate hike on Tuesday, putting pressure on the dollar.

In terms of the report, initial Euro zone GDP for Q1 2022 increased past 5.0 percent YoY to 5.1 percent, as well as above 0.2 percent QoQ estimates to 0.3 percent. In April, however, US retail sales increased by 0.9 percent MoM, somewhat higher than the projected 0.7 percent but lower than the upwardly revised 1.4 percent gain (from 0.5 percent). Japanís preliminary GDP figures for Q1 2022 climbed past -0.4 percent estimates to -0.2 percent QoQ, while Annualized GDP improved to -1.0 percent from -1.8 percent expected.

The Financial Times (FT) reports that China is diverting anti-poverty funds to COVID testing as the crisis worsens, adding to the marketís concerns about the European Commissionís (EC) decision to move away from Russian energy imports. In this environment, US 10-year Treasury rates increased by 0.5 basis points (bps) to 2.988 percent, while S&P 500 Futures struggle to find a clear direction despite Wall Streetís strong advances.

However, if the US Dollar Index, which is currently flat near 103.35, benefits from the latest cautious optimism, gold traders may see additional losses. The greenback gauge could be influenced by second-tier housing figures as well as qualitative factors such as corona virus and geopolitics.

Despite maintaining inside a $5.00 trading range recently, gold prices have maintained the prior dayís retreat from the 200-DMA. XAU/USD may return an annual horizontal support range between $1,790-85, given the bearish MACD signals and the metalís failure to cross the major moving average, which was around $1,838 by press time.

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