Gold extends steady recovery move, Fed decision awaited

Gold was seen building on previous session's steady recovery and moved away from last Friday's over two-week lows.

The precious metal stalled its recent corrective slide from fresh yearly tops, touched earlier this month and traded with positive bias for the second consecutive session on Wednesday. 

The US President Donald Trump's overnight comments, to totally destroy N. Korea, provided a minor boost to the yellow metal's safe-haven appeal. 

This coupled with a mildly softer tone around the US Dollar was also seen benefitting dollar-denominated commodities and collaborated to the commodity's steady up-move through early European session. 

Meanwhile, the uptick seemed lacking any strong momentum as traders opt to remain on the sidelines ahead of the outcome of a two-day FOMC meeting.  The central bank is not expected to move on interest rates but is widely anticipated to announce the plan to start unwinding its massive $4.5 trillion balance sheet. 

The accompanying statement and updated economic projections would also provide fresh clues over possibilities of any additional rate hike action by the end of this year, which would eventually provide fresh near-term directional impetus for the non-yielding metal.

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Technical levels to watch

Immediate resistance is pegged near $1320 level, above which the metal is likely to dart towards $1329 horizontal resistance with some intermediate resistance near $1325-26 area.

On the flip side, $1311 level now seems to protect immediate downside, which is followed by support near $1306-05 zone. A clear break below the mentioned support has the potential to drag the commodity to sub-$1300 level.