• Gold is under modest selling pressure expectations of a ceasefire between Russia and Ukraine.
• The testimony of Federal Reserve (Fed) chair Jerome Powell underpinned the gold.
• Apart from Russia – Ukraine talks, Traders await US Initial Jobless Claims and ISM Services PMI due later today.

The yellow metal is trading up and down within a tight range between 1921.00 – 1934.00 levels in the cautious market ahead of Russia – Ukraine peace talks.

Investors expect that Russia may prefer a truce now, as its economy has melted down on sanctions from the Western leaders. The negotiation talks between Russia and Ukraine today seem to bring more clarity for the Western leaders that either they impose more sanctions on Moscow or gauge options to support the world economy from the Ukraine crisis.

On Wednesday, the Ukrainian military has shown fierce resistance to Russian military troops. This led to the rebound in the risk-off impulse, However the safe-haven gold failed to benefit amid the US dollar’s strength.

Federal Reserve Chair Jerome Powell said he supports a traditional 25-basis-point rate hike during the March 15-16 policy meeting. This reduced the odds of an aggressively tightening policy, however; the hopes of a 50 bps interest rate hike are still live.

In a rare move, Powell gave an overview of the upcoming March meeting “Coming into this meeting, let’s say before the Ukraine invasion, the committee was set to raise our policy rate. The first of what was to be a series of raises expected for this year. Every meeting was live. Decisions would be based on incoming data and evolving outlook,” Powell told U.S. lawmakers. “I also expected we would make great progress on our plan to begin to shrink the balance sheet. The question now really is, how the invasion of Ukraine, the ongoing war, the response from nations around the world, including sanctions, might have changed that expectation.”

However, the certainty of a 25 bps interest rate hike was expected to push the gold prices higher but improvement in the risk appetite of investors mitigated the strength of the precious metal against the greenback.

Apart from the Russia-Ukraine negotiation talks remaining a major driver, Market will also focus on US Initial Jobless Claims and ISM Services PMI, which are due later today.

XAU/USD 4 Hour Chart:

Support: 1912.0 (S1), 1895.7 (S2), 1877.7 (S3).

Resistance: 1946.2 (R1), 1964.2 (R2), 1980.5 (R3).

Gold remains under modest selling pressure as trader’s perceived riskier asset with expectation of ceasefire between Russia and Ukraine. We expect a bearish trend for XAU/USD.