Gold's breakout points are located at $1,307/oz and $1,282/oz for the FOMC showdown

Spot Gold broke the descending resistance line in the hourly charts at the 50-hr SMA, located around $1,297/oz  and went on to score a pre-FOMC high, so far, of $1,299.18/oz .

Earlier in the week, gold was on the back foot, with Agust futures settling below the $1,300/oz  psychological level on easing tensions between the U.S. and North Korea that weighed on the safe haven metal's appeal. However, in the lead into today's FOMC, the dollar has given back some ground across the board and gold has enjoyed a strong reversal of yesterday's sell-off from $1,299.90/oz.

FOMC previews:

FOMC Preview: hike on the table… too little too late?

Markets expect to see a rate hike from the Fed today of a quarter-of-a-percent increase. This would likely send the dollar bid on the knee-jerk, although the outcome will likely prove that much of the hike will have already been built into the price and discounted from gold, (according to the Fed-funds futures, market participants are almost certain that policy makers will increase interest rates by a quarter of a percentage point).

However, much will depend on the statement and the messages from Powell during the presser. The statement from Fed is due at 2 p.m. Eastern Time, a half-hour after gold settles on Comex and then the news conference with Fed Chairman Jerome Powell is chalked up for 2:30 p.m. If the Fed does rate hikes, it will be the second rate hike this year and the seventh increase since the start of the tightening cycle in December of 2015. The question will be how many more hikes are to be expected before the year is out - this will be key for determining the price of gold because gold does not offer a yield, compared to say, US government bonds or which returns will be denominated in dollars.  The Fed's updated economic projections and especially the new ‘dot plot' will be of main interest in this respect. 

While the FOMC could shift to a press conference at every meeting in June, we think that is unlikely without more public discussion among Fed officials. Such a move has both pros and cons, and it isn't one the Fed is likely to make lightly.

- TD Securities

Arguably the biggest benefit from the current schedule of four press conferences per year is a strong market signal for a continued "gradual" pace of rate hikes.

- TD Securities

 In our view the Fed is likely to maintain the projection of a total of 3 rather than 4 rate hikes this year.  While this may soften the USD near-term, it remains our view that rising rate differentials will support the USD medium-term.  

- Rabobank

Gold levels

The yellow metal's price is submerged by neutral MAs and flat RSI longer term. The 100-W SMA is a key downside target at $1,277/oz.  $1,324/oz comes as the key upside target on a breakout of the consolidating around the $1,300 handle. Crucially, gold has been holding above the previous weekly low down at $1,282. The 21-D SMA at 1296 is key that opens up the 200-D SMA, at 1307, ahead of the 100-D SMA, (1324), that guards a reversal to the key $1,360 level.