Gold clocks fresh weekly highs near $ 1225, Fed turns neutral

Post-FOMC overnight rebound in gold gained further traction in Asia, driving the yellow metal to fresh one-week highs of $ 1225.55.

Gold bulls relieved by less hawkish Fed

Currently, gold advances +0.50% to trade at $ 1225.25, extending the bounce from below $ 1200 mark. Gold bulls cheered less hawkish/neutral stance adopted by the Fed at its policy decision late-Wednesday, after the committee decided to hold the planned pace of monetary tightening, while raising rates by 25bps as widely expected. The Fed kept the Dots plot unchanged, sticking to their outlook for two more rate hikes this year and three more in 2018.            

 In response to the Fed outcome, the US dollar and treasury yields sharply, offering the non-interest paying gold the much-needed impetus. Gold jump more-than $ 20 on the Fed verdict and now extends the rebound, looking to book the first weekly gain in three.

Looking ahead, we have a busy calendar for the gold traders, with major central banks’ policy outcomes due today. The immediate focus now remains on the BOJ policy announcement due out shortly.

Comex Gold Technical Levels                                  

The metal has an immediate resistance at 1226.77 (20-DMA) and 1249.39 (200-DMA). Meanwhile, the support stands at 1208/06 (10 & 5-DMA) below which doors could open for 1200 (key psychological support).