Gold resumes downslide ahead of the key FOMC meeting

Following yesterday's rebound from 10-month lows, Gold resumed with its bearish slide and has now reversed its entire tepid recovery move recorded on Monday. 

Currently trading around $1158-59 region, testing session lows, the metal drifted in to negative territory for third session in the previous four amid prevalent upbeat sentiment, as depicted by buoyant European equity markets and which tends to dent demand for traditional safe-haven assets. Moreover, expectations of imminent Fed rate-hike action continues to underpin the US Dollar, which was seen trying to recover some of its Monday's lost ground, is further weighing on dollar-denominated commodities - like gold. 

Hence, investors will remain focused on the final outcome from a two-day FOMC meeting on Wednesday, where the central bank is widely expected to hike rates for the first time since Dec. 2015. However, market would be more interested to see the Fed’s updated economic and interest-rate projections. Signs of tighter Fed monetary policy stance in 2017 might now attract fresh bout of selling pressure around the non-yielding yellow metal. 

Technical level to watch

From current levels, $1151 region (Monday's multi-month low) seems to protect immediate downside, which if broken is likely to pave way for continuation of the near-term depreciating move towards its next support near $1140 region. On the upside, recovery back above $1165 immediate resistance, leading to a subsequent break through $1170 resistance, is likely to trigger a short-covering rally towards $1179-80 resistance area.