After dipping to $1315 region, Gold has managed to recover the lost ground and is currently trading nearly unchanged around $1318 level, awaiting for fresh impetus from FOMC monetary policy decision.
On Tuesday, the yellow metal got a boost as the US Dollar remained on the back foot amid intense selling pressure against the Japanese Yen. The up-move, however, was capped as strong US economic data further added to expectations of an imminent Fed rate-hike in 2016 and provided the much needed respite for the US Dollar that weighed on dollar-denominated commodities, including gold.
Meanwhile, mixed sentiment around equity markets has failed to act as a supportive pillar for the safe-haven appeal of the precious metal.
Investors’ sentiment towards the precious metal, however, would now be determined by the outcome of Fed monetary policy meeting. Hawkish monetary statement would certainly be supportive for the greenback and would eventually drive gold in the near-term.
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Technical levels to watch
On the immediate upside, $1325 level remains immediate resistance to clear. Momentum above this immediate resistance, and a subsequent strength above 20-day SMA resistance near $1335 region, would enable the commodity to head back towards its next important resistance near $1350 level.
Meanwhile on the downside, weakness below $1312 recent lows support now seems to force the metal to break below $1305-1300 strong support and aim towards testing 50-day SMA support near $1290 region.