TenkoFX - Analytics

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    Gold stable around $1285, awaits Fed statement for further direction Haresh Menghani

    After an initial dip to $1282, Gold inched higher to currently trade around $1285 level as market now await for fresh impetus from today's FOMC announcement.On Tuesday, the precious metal rose for fifth straight session to touch a near six-week high level of $1289 as investors rushed to safe-haven assets on worries surrounding the 'Brexit' referendum. Ahead of the key Fed monetary policy decision, the yellow metal is struggling to find direction as risk aversion seems to have subsided, depicted by a broad recovery in Asian equity markets.Although, the US central bank is expected to keep interest-rates on hold, a hawkish tone is likely to exert selling pressure on the yellow metal as higher interest rates dents demand for non-interest yielding metals like gold. However, uncertainty surrounding the UK-EU referendum on June 23 is likely to limit any sharp depreciating move for the metal.Technical levels to watchFrom current levels, the metal need to build on to its momentum above $1288-89 (May 16 high), above which it seems all set to extend its upward trajectory immediately towards $1295 (May 06 high) resistance. A sustained strength above $1295 resistance seems to assist the metal to move back above $1300 mark and retest a multi-month highs resistance near $1303-05 region. On the flip side, weakness below $1280 is likely to drag the precious metal towards $1271-70 support, which is followed by support near $1263-62 horizontal area. Weakness below $1263-62 support, the metal seems to drift back towards 50-day SMA strong support near $1250 round figure.


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