Gold Trades Above One-Month Low, Fed Decision Eyed

Precious gold steadied on Monday trading, after rebounding from month low, with investors focusing on the Fed's monetary decision.

The shiny metal found support as if fell near $1700 levels to trade around $1722.36, where it experienced a second straight weekly loss last week to continue its drop after falling from resistance near $1800 levels couple of weeks ago.

The trading range for this week is expected among the key support at 1685.00 and key resistance now at 1780.00.

Last week, the yellow metal recorded 1.84% drop amid worries regarding global recovery and European debt crisis, along with improvement in U.S. data.

Today's data Japan’s exports slipped the most since last year’s record earthquake adding to worries global recovery is fading, especially as last week's data showed China's economy slowed for a seventh consecutive quarter.

In Europe, European leaders took a step towards creating a single banking supervisor during their EU summit last wee as they agreed to allow the bloc's rescue fund could start recapitalizing ailing banks starting from 2013, where the European Central Bank will be the main supervisor by January 1.

Yet, still there are worries from Spain which still did not decide on its potential bailout. On the upside, Spanish Prime Minister Mariano Rajoy, along with his People's Party (PP), succeeded in the tough test on Sunday as he managed to win a vote at the legislature of his home region of Galicia.

Moreover, gold faced pressure from the improvement in U.S. data which eased speculations of seeing additional stimulus in the coming period, thereby eroding the metal's appeal as an inflation hedge.

This week, the main attention is predicted to be on the Fed's monetary decision which is estimated to witness a hold in interest rate while policy makers may say they may not need to add to much money as the recent data is showing improvement.

On the flip side, the dollar inched up against a basket of major currencies, as depicted by the Dollar Index, to hover around 79.65, where it faces tough resistance at that level which represents SMA 200 level on the weekly charts.

Crude oil for December's delivery is currently trading higher around $90.65 a barrel from the day's opening of $90.29.