Gold meets fresh supply, but holds above $ 1200 ahead of Fed
|- Gold´s upside capped by expectations of Fed’s hawkish forward guidance.
- However, upcoming US-Japan trade talks could offer some support.
Gold prices on Comex continue to trade choppy so far this Wednesday, unable to find a clear direction heading into the crucial Fed monetary policy decision.
The yellow metal derives some support from weaker Treasury yields and US-China trade concerns while increased nervousness ahead of the meeting between the US President Trump and Japanese PM Abe also underpins the sentiment around the safe-haven gold.
Markets are closely watching the talks between both the leaders due later today in New York later, in order to see if the two countries have made progress on how to promote bilateral trade.
However, the main event risk for the metal remains the FOMC decision, as the key focus remains on the Fed’s interest rates outlook for 2019. A hawkish tone in the Fed’s forward guidance is likely to offer extra legs to the recent rally in the Treasury yields, in turn weighing negatively on the non-interest bearing gold.
Gold Technical Levels
Carol Harmer at Charmer Trading Academy noted: “Now we could wait for the breakout which is 1217….we've been here before...loads and loads of times….over the years….and now that I am falling slightly back in love with it...for me a break above here would confirm….adding above 1224 as we have done countless times…But on pullbacks it been holding 1187….another fav level...and although trading sideways...stochastics have fallen quite a bit..so I think this week….If gold hangs onto 1195….we will have a go at the topside....”
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