Gold struggles to build on overnight rebound, hangs near two-week lows
• Easing USD bearish pressure prompts some fresh selling.
• Fading safe-haven demand adds to the downward pressure.
• FOMC decision/statement eyed for a fresh directional impetus.
Gold came under some renewed selling pressure on Tuesday and eroded part of overnight modest recovery gains from over 2-week lows.
On Monday, the precious metal touched an intraday low level of $1307.79, its lowest level since March 1, but managed to recover lost ground and ended the day in positive territory amid some renewed US Dollar selling pressure.
The USD bearish pressure now seems to have abated and was seen weighing on dollar-denominated commodities - like gold. Adding to this, a slight improvement in investors' appetite for riskier assets, as depicted by some initial signs of stability in the equity markets, further dented the precious metal's safe-haven appeal and collaborated to the weaker tone.
Investors now look forward to the latest FOMC monetary policy decision, where the central bank is widely expected to raise interest rates. The accompanying statement, featuring updated economic projections and 'dot plot' will help determine the next leg of the directional move for the non-yielding yellow metal.
Technical levels to watch
Immediate support is pegged near $1313 level, below which the commodity might again aim towards testing the very important 200-day SMA support near the $1305 region. On the upside, $1319-20 area now seems to have emerged as an immediate resistance, above which a bout of short-covering could lift the pair further towards $1326 supply zone.