Gold retreats from 2-week highs, awaits Fed decision

FXStreet (Mumbai) - Gold price on Comex extends its corrective slide and now drops to lows in the mid-European session as the US dollar manages to recover partial losses, heading closer towards the Fed outcome.

Gold back below $ 1120

Currently, gold trades -0.23% lower at 1116.50, moving away from fresh three-week highs recorded at 1123.70 on Wednesday. Gold edged lower this session as markets booked profits and unwound their gold longs following yesterday’s upsurge, ahead of the Fed verdict on the interest rates.

The decision could trigger volatility on the market. A rate hike would subdue demand for non-interest-paying assets like bullion and also boost the US dollar, and make dollar-denominated assets therefore less attractive for investors paying in other currencies.

Meanwhile, the US dollar index, the virtual gauge of the greenback’s relative strength trades -0.13% lower at 95.38, recovering from session lows struck at 95.24.

Gold Technical Levels

The metal has an immediate resistance at 1123.70 (Sept 16 High) and 1132.90 (Sept 3 High) levels. Meanwhile, support stands at 1100 below which doors could open for 1078.60 (Jul 24 Low) levels.