Gold extends the drop to $1,200 ahead of FOMC

The ounce troy of the precious metal is slightly lower on Wednesday, currently testing the $1,200 neighbourhood ahead of US data and the FOMC meeting.

Gold focused on FOMC

The yellow metal is approaching the critical $1,200 handle so far today amidst increasing cautiousness in the global markets ahead of the imminent FOMC interest rate decision, expected later in the NA session.

Market consensus is expecting the Committee to hike rates by 25 bp today, although investors’ focus shifted to the subsequent press conference by Chief Janet Yellen and the updated forecasts for economic growth and interest rates (‘dots plot’).

Other than the FOMC meeting, traders will be looking to key US inflation figures gauged by the CPI and Retail Sales during last month, which should keep the buck under pressure as well as the USD-denominated assets.

Gold key levels

As of writing Gold is losing 0.10% at $1,201.35 facing the next support at $1,196.20 (low Mar.10) followed by $1,185.60 (low Jan.26) and finally $1,177.07 (61.8% Fibo of the December-February up move). On the flip side, a surpass of $1,205.30 (100-day sma) would expose $1,210.00 (high Mar.13) and then $1,230.25 (23.6% Fibo of the December-February up move).