Spot gold remains under a bearish pressure after yesterday’s drop. The yellow metal has been trading below the key $1,300 mark since early-June and still doesn’t show any signs of a sustained recovery as market focus has shifted from geopolitics to the upcoming FOMC meeting.
The Fed rhetoric could affect the overall sentiment in the global financial markets and the dollar dynamics as well. Should the regulator hint at four tare hikes this year, the greenback will rise across the board amid growing market expectations. For the precious metal, this scenario would be bearish and could intensify the downside pressure.
Gold still looks unattractive for bulls, despite the price has been trading close to 2018 lows. This reflects the market mood as the dollar remains within the uptrend despite that its impetus has abated recently. And the potential “hawkish” Fed may fuel the USD demand today. In this case, gold will likely challenge the intermediate support around $1,290 and test the $1,297 level, depending on the degree of expected dollar bullishness.