The current fundamental situation is supportive for Gold. After announcing that it would pay the bond interest due on Thursday, China's struggling property giant Evergrande Group eased concerns about the company's impending bankruptcy. The Chinese central bank also injected cash into the banking system, which helped to increase the global risk sentiment. If global risk sentiment increase, that considered a positive factor for rising gold price.
Tapering is one of the significant issues for today's FOMC as well. FED chairman will announce when the tapering will start. If FED avoids talking about the tapering issue, the gold price will go up and test above the 1800 price zone. If FED says tapering may start this year, there is a chance that Gold may drop. Otherwise, I don't see any other option that will be positive for the USD.
Currently, The U.S. economic condition is moderate, but that is not enough to support the USD unless FED announces that the tapering will be starting soon or this year. However, based on fundamental factors, Gold is in good condition rather than the USD.
Technical View
Technically gold is in a downtrend; there is no doubt about it. In the daily chart, gold breaks below the trend line. So, technically it has an excellent chance to drop the gold price if FED announces the tapering issues.
The following support and target 1 area identify nearly 1740/1745 price zone from the present rate. Breaking below 1740 will open the door for the 1690/1685 price zone.
On the other hand, if FED delivers a too dovish statement. Maybe we may see another fake break out. Immediately gold may test near term resistance 1800.00 price zone. And the final upward target is the 1830/35 price zone. 1835 is critical resistance. So, it is tough to break above the 1835 price zone.
FED: If progress continues as expected, a taper may soon be warranted. I mean it's all about economic reports. The latest economic reports are moderate. So, Ugold may rise first, and then it may drop.