FXStreet (Mumbai) – Gold prices advanced in Asia, but gains were capped at the 5-DMA located at USD 1066/Oz levels.
Eyes FOMC rate decision
Today’s rate decision is more important for gold traders as it would throw a light on how the Fed intends to tighten its policy and reduce the size of its bloated balance sheet.
A point worth noting is that gold prices are directly correlated to the size of the Fed’s balance sheet. So a mere policy tightening may not be enough to rattle the yellow metal, but if the Fed begins reducing the size of its balance sheet, the yellow metal could be worst hit.
Gold Technical Levels
At USD 1065.38/Oz, the immediate resistance is seen at 1070.35 (10-DMA), above which the gains could be extended to 1080.48 (23.6% of Oct high-Dec low). On the other hand, a break below 1058.41 (previous day’s low) would expose 1050.50 (Dec 2 low).
(Market News Provided by FXstreet)