The ounce troy of the precious metal is navigating a narrow range so far on Tuesday, hovering over the $1,310 area ahead of the FOMC meeting due tomorrow.
Gold attention to Fed
The yellow metal is alternating gains with losses amidst a broad-based absence of a clear direction and following two consecutive daily pullbacks.
Bullion should stay under pressure in light of the key FOMC gathering tomorrow, although expectations for a Fed’s move stay close to zero. In fact, and according to CME Group’s FedWatch tool, the probability of the Fed staying ‘on hold’ at Wednesday’s meeting is almost at 99%.
However, market participants should closely follow the FOMC’s statement looking for any clues regarding the Fed’s plans to reduce its balance sheets, which could turn out to be a catalyst for some appreciation in the greenback, as well as any hint on a potential rate hike by year end.
Additionally, geopolitical tensions stemming from the Korean peninsula appears diminished for the time being, collaborating with the metal’s downside.
Gold key levels
As of writing Gold is gaining 0.02% at $1,311.06 facing the immediate hurdle at $1,322.60 (21-day sma) followed by $1,325.02 (23.6% Fibo of the July-September up move) and finally $1,331.57 (10-day sma). On the other hand, a breach of $1,301.89 (38.2% Fibo of the July-September up move) would open the door to $1,282.61 (55-day sma) and then $1,281.30 (low Aug.25).
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