The bullion ran through fresh bids during the European session, now pushing further towards $ 1250 mark as we head closer towards the Fed interest rate decision.
Gold: Short-covering ahead of Fed
Currently, gold trades 0.30% higher at 1246.30, retreating from fresh session lows reached at 1247.80 last hours. The bullion regained lost footing and climbed back higher as markets resorted to repositioning ahead of the key FOMC statement, which may set the tone for further moves in the dollar-denominated yellow metal. Moreover, with markets pricing in a no-hike at today’s meeting, the bullion found fresh impetus and rebounded higher. Gold tends to benefit in a low interest rate environment, as it’s a non-interest paying investment asset.
Although the prices maintain a range bound movement as focus remains on the Fed’s language in the FOMC statement, and if provides any hint on June rate hike prospects.
Gold Technical Levels
The metal has an immediate resistance at 1250 (psychological levels) and 1257/58 (previous tops). Meanwhile, the support stands at 1241/40 (1h 200-SMA/ round number) below which doors could open for 1238 (1h 50-SMA).