Gold gained some traction on Wednesday and was seen building on to its recovery back above the key $1200 psychological mark.
Currently trading around $1204 region, uncertainty over the outcome of the Dutch elections was seen boosting demand for the precious metal's safe-haven appeal. Adding to this, growing concerns over a second Scottish independence referendum also supported Wednesday's up-move, helping the metal to reverse all of its losses recorded in the previous session.
Investors focus, however, would remain glued to the outcome of a two-day FOMC meeting, where the central bank is universally expected to raise interest rates. With Fed rate-hike a done deal, investors await for additional clarity on the central bank's next policy move (dot-plots), which would determine the US Dollar's next leg of directional move and eventually provide fresh impetus for dollar-denominated commodities - like gold.
Meanwhile, important US macro data - CPI print and monthly retail sales, would also be looked upon for short-term trading opportunities during early NA session.
Technical levels to watch
Further up-move beyond $1205 level is likely to confront resistance at 100-day SMA near $1208 region, which if cleared decisively should accelerate the up-move towards $1215 horizontal resistance. On the downside, $1198-97 area now seems to have emerged as immediate strong support, which if broken would turn the commodity vulnerable to extend the downslide towards $1188-87 support area ahead of $1180 level.
- R3 1216.17
- R2 1211.93
- R1 1205.27
- PP 1201.03
- S1 1194.37
- S2 1190.13
- S3 1183.47
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