Gold recovers the smile above $1,340/oz, Fed eyed
- Bullion trades in black figures after two days with losses.
- Softer USD gives support to the move.
- (Expected) hawkish Fed could weigh on Gold.
The ounce troy of the yellow metal is posting decent gains around the $1,340 area on Wednesday amidst a continuation of the selling bias surrounding the buck.
Gold attention now to FOMC
After two consecutive sessions in the red territory, Bullion is now staging a rebound to the $1,340/45 band after dropping to fresh multi-day lows on Tuesday, all following the moderate and renewed offered tone surrounding the greenback.
In fact, the US Dollar Index (DXY) stays under pressure following Trump’s SOTU speech on Tuesday and it has returned to the sub-89.00 region, closer to last week’s 3-year lows.
Despite the current squeeze higher, the precious metal should stay under scrutiny in light of the imminent FOMC meeting, where market participants expect the Federal Reserve to give further details on the prospects of future tightening ahead in the year.
Gold key levels
As of writing Gold is up 0.55% at $1,342.80 facing the next up barrier at $1,366.13 (2018 high Jan.25) seconded by $1,367.81 (high Aug.2 2016) and then $1,375.30 (high Jul.6 2016). On the other hand, a breakdown of $1,334.53 (low Jan.30) would open the door to $1,332.47 (21-day sma) and finally $1,324.35 (low Jan.18).
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
