Gold stays on the road to 200-DMA support ahead of FOMC

Gold struggles for a clear direction, after a three-day south-run, during early Wednesday. Even so, the yellow metal stays on the bears’ radar while keeping the downside break of a 2.5-month-old support line, now resistance, around $1,860 by the press time. Hence, sellers are directed towards 200-day SMA (DMA) level near $1,840 during further downside. However, any more weakness past $1,840 depends upon today’s US Federal Open Market Committee (FOMC) announcements. Among them, a direct hint of tapering and/or rate hikes could be considered detrimental to gold prices.

On the contrary, a positive surprise from the Fed Chairman Jerome Powell & Company will help the quote portray a corrective pullback towards crossing the previous support line near $1,885. Though, gold bulls aren’t likely to be convinced until the quote stays below the yearly resistance line, around $1,908. In a case wherein gold prices offer a daily close beyond $1,908, a run-up to refresh yearly high near $1,960 can’t be ruled out.