XAU / USD clings to modest gains near $ 1,780 ahead of FOMC

• Gold faced rejection near the 200-hour SMA for the second consecutive session on Wednesday.
• The risk appetite boost was seen as a key factor acting as a headwind for the safe haven metal.
• A dovish USD price action did little to provide support ahead of the FOMC’s policy decision.

Upgrade: After rising early in the European session, the XAU / USD pair lost its traction and fell towards $ 1,770. However, with markets remaining cautiously upbeat ahead of the FOMC’s monetary policy announcements, the dollar struggled to find demand and allowed gold to rise. Currently, the pair is holding on to modest daily gains close to $ 1,780. Reflecting the uninspiring performance of the USD, the US Dollar Index, which tracks the currency’s performance against a basket of six major pairs, is posting small losses at 93.13. The Fed is expected to keep its policy rate unchanged, but investors will closely follow the revised Projections Summary and President Jerome Powell’s press conference.

technical perspective

From a technical perspective, the 200 hourly SMA, currently around the $ 1,778-80 zone, now appears to act as a key point for short-term traders. A sustained force beyond should allow the bulls to regain the $ 1,800 level and aim to challenge a technically significant 200-day SMA, around the $ 1,806 zone.

On the other hand, the $ 1,766-65 region is likely to act as immediate support, which if broken could make gold vulnerable. The next relevant support is pegged near the $ 1,754-52 zone, below which the XAU / USD is likely to accelerate the slide towards the horizontal zone of $ 1,730-29 en route to the round level of $ 1,700.