Gold stages minor recovery bounce ahead of FOMC meeting outcome

Gold staged a minor recovery bounce and traded with marginal gains on Wednesday ahead of the FOMC rate decision later during the day.

Currently trading around $1163 level, testing session peaks, the precious metal reversed Tuesday's depreciating move to settle at its lowest level since early February. Mild US Dollar retracement, coupled with the prevalent cautious sentiment, ahead of the key Fed monetary policy decision, has been the key factors supporting the precious metal's recovery on Wednesday.

Looking at the broader picture, the metal has been oscillating in a narrowing trading range, indicating a bearish consolidation phase following its recent slump to 10-month lows. 

Investors now brace for the first Fed rate-hike action in 12-months and would also seek clarity over the central bank's monetary policy outlook for 2017, which would eventually provide fresh impetus for the yellow metal. A less hawkish Fed would trigger a near-term relief rally, while a faster rate-tightening cycle could weigh heavily and attract fresh selling pressure around the non-yielding metal.

Technical levels to watch

Immediate resistance on the upside is seen at $1165 level above which the commodity is likely to witness a short-covering move towards $1179-80 area. On the downside, immediate support is pegged at $1156-55 region, which if broken could accelerate the slide below multi-month lows support near $1151 level, towards its next support near $1140 area.
 

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