Gold rebounds from 10-month lows and rises above $1160

A weak US dollar boosted gold prices during the American session. The value of the ounce is now positive for the day, although still faces bearish pressure ahead of Wednesday FOMC decision. 

The metal bottomed earlier at $1151, the lowest since February. Then it rebounded and extended the recovery during the American session as US bond yields declined ahead of the FOMC decision. 

FOMC preview: We expect a rate hike and no major changes in forecasts - Danske Bank

Recently XAU/USD peaked at $1165 and it was trading at $1162, near daily highs and more than $10 above the lows. Despite the recovery, the dominant trend still points to the downside. From the level it had exactly a month ago is 6% lower.

Technical levels

In the short-term resistance levels are seen at $1165 (daily high), $1172 (Dec 09 high) and $1180 (Dec 07 high). On the opposite direction, support might be seen in the $1150 region, followed by $1142 (and $1130 (Feb 02 & 03 high).