Gold seesaws around $1,500 with all eyes on FOMC

• Gold modestly changes amid recent improvement in risk sentiment.
• Traders await the key Fed meeting details for fresh impulse while trade/political news has been positive off-late.

With the global traders on a wait and see approach ahead of the key event, Gold offers fewer moves while taking rounds to $1,500 during Wednesday’s Asian session.

Not only trade positive news from the US, Japan and China but Saudi diplomat’s comments that they will be able to overcome the drone attack’s damages in few weeks recently favored market optimism. Also supporting the bulls were positive statistics from the US and the Eurozone.

However, the latest news that the Saudi Defence Minister will hold a press conference somewhere near 14:30 GMT to produce leftovers of the Iranian weapons used in the attack have pulled the optimists backward.

All eyes on Fed statement, Powell's comments

Even if trade/political headlines will keep offering background music to global market momentum, monetary policy meeting by the Federal Open Market Committee (FOMC) will be the key to watch. It is almost a given thing that the US central bank will announce a 0.25% Fed rate cut and hence it won’t be able to offer any major price movements unless surprising the forecasters. As a result, Fed’s Monetary Policy Statement and Fed Chair Jerome Powell’s press conference will be crucial to watch.

Westpac favors the market sentiment of further rate cuts with cautious statements from the Fed Chair as it says, “Markets are fully priced for the FOMC to cut its federal funds rate 25bp to 1.75-2.0% but there is plenty of detail to absorb. Along with the usual statement, this meeting will provide quarterly forecasts of GDP, inflation, the unemployment rate and the “dots” of FOMC members’ projection of the funds rate as at end-2019, 2020, 2021 and “longer term.” We will also hear from Fed chair Powell in his press conference. Westpac’s view is for 25bp rate cuts at the three FOMC meetings remaining this year. But the median “dots” profile is likely to be more cautious, while Powell may err on the hopeful side even as he discusses a rate cut aimed at providing insurance against trade and other risks to the US economy.”

Technical Analysis

$1,534/35 area including August 13 high and low marked on September 04 seems to limit the bullion’s near-term upside towards $1,557 whereas multiple lows surrounding $1,485/84 could restrict immediate declines ahead of highlighting July month top near $1,453.