Spot gold hit the lowest level of 1194.91 since 31st Jan on 10th, and rebounded as the zone between 1195 – 1197 is the near term major support zone, where there is a stronger support.
Spot gold bears had tested the significant support line at for the second time on 14th Mar, the downtrend was held above the support.
The daily Stochastic Oscillator is below 30, suggesting a further rebound.
On the 4-hourly chart, the price is still trading below the 10 and the 20 SMAs, be aware that the upside pressure is still heavy.
The Fed will announce its interest rate decision and monetary policies, at 18:00 GMT today. The FOMC press conference follow at 18:30 GMT.
Markets have been expecting a March rate hike for a long time, the expectations have been largely priced in since February. Therefore, even if the Fed Chair Yellen announces a rate hike today, it would be in line with market expectations.
We can expect volatility; however, the volatility might not arise from the rate decision, but more from the updated economic outlook and new projections. If Fed Chair Yellen makes a relatively hawkish comment, then USD will likely keep on strengthening.
In this situation, it will likely weigh on gold prices and test the significant support zone between 1195 – 1197 again. If the zone is confirmed broken, then the bears will likely further test the next support line at 1188. However, If the 1195 – 1197 support zone is not broken, then we can expect that gold prices will likely rally afterwards from this support.
Nevertheless, if the Fed surprisingly doesn’t raise rates today, then it will likely trigger a dollar sell-off. In this situation, gold prices will likely rally.
The resistance is at 1205, followed by 1207 and 1210.
The support line is at 1200, followed by 1197 and 1195.
Keep an eye on the US retail sales and CPI figures for February, to be released at 12:30 GMT today, as it will likely cause some volatility to the dollar, dollar crosses and commodities, prior to the FOMC meeting.