From a near-term technical perspective, despite the 14-day Relative Strength Index (RSI) lurking below the midline, a dovish Fed rate hike could turn the table against bears, allowing XAU/USD bulls to recapture the bearish 21-Daily Moving Average (DMA) at $1,660 convincingly. Gold bulls could flex their muscles towards the end-October high at $1,675 while gathering strength to challenge the $1,700 mark.
However, on a hawkish surprise, gold price could resume its broader downtrend, with the initial support seen at the recent range lows around $1,638. The next downside cap is aligned at the $1,620 round number, below which the October low at $1,617 could be threatened.
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