Gold price continues its one-month consolidation with few signs of a more robust breakthrough in either direction in the daily charts. However, the upcoming FOMC decision could bring a more aggressive price action in the precious metal market, depending on the dollar direction. There is some pick up in dollar demand in the short-term charts, which keeps the metal on the defensive.
Obviously “hawkish” hints by the Fed will drive the yellow metal lower, with the target at $1,185. Currently, the bullion is changing hands below the $1,200 level again, unable to sustain its shallow gains as the downside pressure on the greenback is limited.
Should however investors rush to “sell the fact” after a rate hike, gold could attract a decent buying interest. On the upside, the metal is still capped by the $1,214 figure that prevented prices from a more steady corrective recovery on several occasions since early August. As long as the yellow metal remains below this threshold, downside risks persist.