Gold bid around $1,200, FOMC eyed

The troy ounce of the precious metal keeps hovering over the $1,200 key mark on Tuesday ahead of the FOMC meeting and rate decision due tomorrow.

Gold cautious ahead of FOMC

The yellow metal stays in the area of 2-month lows so far this week amidst increasing cautiousness among traders in light of the upcoming FOMC meeting (Wednesday), while the better tone around the buck is also capping occasional bullish attempts.

Market consensus has practically priced in a 25 bp rate hike at tomorrow’s meeting, although the subsequent press conference by Chief Janet Yellen has been growing in importance regarding the potential rate path in the next months.

According to Reuters’s Fedwatch, the probability of a rate hike on Wednesday is at just above 94%, in line with the solid performance of US yields and the US Dollar Index in recent weeks.

Gold key levels

As of writing Gold is gaining 0.27% at $1,206.35 and a breakout of $1,209.54 (55-day sma) would expose $1,210.00 (high Mar.13) and then $1,230.25 (23.6% Fibo of the December-February up move). On the other hand, the next support aligns at $1,196.20 (low Mar.10) followed by $1,185.60 (low Jan.26) and finally $1,177.07 (61.8% Fibo of the December-February up move).