On Wednesday, the trading activity remains thin on the verge of May Day. Most of the European markets enjoy the holiday, but the forex brokers are still active and offering trading services. The precious metal gold quickly reversed an early European session, falling to $1278 region.
Gold bears once again managed to find excellent support around a double bottom support area of 1,277. The mentioned support might now act as a key pivotal point for the commodity’s near-term trajectory as the market focus remains on today’s critical event risk - FOMC policy decision. On the upper side, gold may face strong resistance at 1,287.
It would be prudent to wait for the FOMC as gold may deviate on the release of Fed Rate decision today. For your info, Fed is widely expected to keep the interest rates on hold at 2.50%.
We got two options here:
- Hawkish FOMC could trigger a sharp sell-off until 1,277 and 1,271.
- Dovish FOMC could trigger a bullish trend until 1,287 and 1,292.