XAU / USD falls to a low of $ 1,830 before the FOMC meeting

• Gold has been on the defensive amid a stronger dollar in recent trade, recently falling to $ 1,830.
• A stronger dollar amid risk aversion and dovish news from the ECB has hit the precious metals markets.

Gold Spot Prices (XAU / USD) They have been down in recent trading, falling from early European session highs at $ 1,850 to recent day lows just above $ 1,830. That means spot prices have now lost control of the 200-day moving average at $ 1,847, around which prices had consolidated during the Asia Pacific trade.

The driver for the decline has been a stronger US dollar, which has rebounded amid a broad deterioration in market appetite for risk. Although the market is experiencing volatility in other asset classes (such as equities), precious metal markets trading is likely to remain somewhat restricted as traders remain cautious ahead of Wednesday’s FOMC meeting; The FOMC will release the results of its latest monetary policy decision at 7:00 p.m. GMT and FOMC Chairman Jerome Powell will address and answer media questions at 7:30 p.m. GMT. Right now, gold spot prices are down 0.8% or around $ 15 on the day.

USD’s strength is exacerbated by dovish comments from ECB members and sources on Wednesday; ECB Governing Council member Klaas Knot, who is often one of the bank’s most aggressive members, made moderate remarks saying the ECB has the necessary tools, including further rate cuts, to avoid further strengthening. of the EUR. Meanwhile, just a few minutes ago, ECB sources cited by Bloomberg said that ECB officials reportedly think markets are underestimating the chances of the bank cutting interest rates and that ECB policy makers are said to be bank agree that such stimulus is still a viable option. This latest news triggered an outbreak of weakness in the EUR (and other G10 pairs) and strength in the US dollar, which has hit precious metals markets.

Technical levels