Gold Price Analysis: XAU/USD clings to small gains near $1,720 ahead of FOMC
|- XAU/USD closed the first two days of the week in the positive territory.
- Major European equity indexes post modest losses on Wednesday.
- US Dollar Index remains depressed as focus shifts to FOMC's policy announcements.
The XAU/USD pair closed the first two days of the week in the positive territory and rose $30 during that period. With the trading action turning subdued on Wednesday, the pair is staying relatively quiet and posting modest gains around $1,720.
The selling pressure surrounding the global major equity indexes allowed the precious metal to find demand as a safe-haven. On Wednesday, European stock indices are down between 0.5% and 0.9%, suggesting that investors continue to stay away from risk-sensitive assets. Furthermore, the S&P 500 futures are losing 0.22% to point out to a negative opening in Wall Street.
Focus shifts to FOMC
Meanwhile, the sharp drop witnessed in the US Treasury bond yields caused the greenback to weaken against its rivals and provided an additional boost to XAU/USD.
Ahead of the FOMC's monetary policy announcements, the US Dollar Index is down 0.14% on the day at 96.25. Additionally, the US economic docket will feature the Consumer Price Index (CPI) data from the US, which are likely to be ignored by the market participants.
Previewing the FOMC event, “despite the gloomy economic figures from the last couple of months, the focus shifted to economic recoveries," FXStreet's Chief Analyst Valeria Bednarik said. "It will be the speed of this last in the eyes of the FOMC that will move the market. Further rallies in Wall Street on an optimistic outlook, will likely keep the greenback under pressure.”
Technical levels to watch for
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