FxWirePro: Gold trades lower ahead of Fed policy, good to buy on dips

Gold has shown a minor weakness and lost more than $10 on US-China trade optimism which has boosted risk sentiment. This week's movement on the yellow metal depends on the US Federal funds rate and their dot plot for a future rate cut. Markets have already factored 25 bps rate cut, any dovish tone from the Fed will push the gold prices higher. The chance of 25bps has declined slightly from 9501 to 94.1% 1-day ago, according to the CME Fed watch tool.

US10-year yield is trading high and hits 1-1/2 month high. It is well above major resistance at 1.81%, a jump till 1.907% likely.

Technically, near term support is around $1480 and any violation below will drag the yellow metal down till $1473/$1458. Major weakness only below $1458.

The near-term resistance is around $1515-17 and any convincing break above will take the yellow metal till $1525/$1540. Any bullish continuation only above $1555.

It is good to buy on dips around $1495-96 with SL around $1480 for the TP of $1555.