Gold is trading relatively flat on Tuesday, displaying caution ahead of the Federal Reserve meeting after a recent recovery. The yellow metal has dipped before toward the $1,900 mark, influenced raised concerns about prolonged high-interest rates, a scenario the central bank has consistently warned about.
Gold traders are now eagerly awaiting whether the Fed will acknowledge the possibility of concluding its rate hikes, akin to the European Central Bank's stance last week, or if it will maintain the expectation of further hikes. The crucial dot plot, reflecting Fed officials' rate projections, will play a pivotal role in determining market sentiment. A hawkish tone from the Fed could jeopardize the $1,900 level.
In terms of technical analysis, gold faces notable resistance levels in the range of $1,930 to $1,950. This range includes key Fibonacci levels, the 55/89-day simple moving average band, and a declining trendline. A breakthrough above $1,950 would mark a significant bullish move, either before or after the central bank meeting. Such a development could shift market focus back to July highs and, notably, the psychological barrier of $2,000, a level gold has only briefly surpassed in its history, most recently in May.
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