Gold ahead of Fed’s decision: To reverse or not to reverse?
Gold marked a strong pre-Fed breakout on Tuesday, with the precious metal losing 1.3% and clearing the congestion we saw in the past week. With the markets waiting for Fed guidance on taper, we have a top event risk event for gold. At 1.369 at the time of writing, we expect to see a quiet session during Europeans hours. We do not expect the Fed to realise a taper just yet, which would means more need for a USD alternative. In that case, the market could clear Tuesday’s losses and head towards 1400 with key resistance area sitting at 1394. A break above that level would one the door for 1417 and 1441. In the alternative scenario, watch out for key support levels at 1342 and 1318.
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