Gold confined in familiar trading range; awaits Fed, BOJ for fresh impetus

Having posted a session high at $1318, Gold trimmed some its early gains and has now retraced back to currently trade around $1314-15 band.

Extending its rebound from the vicinity of 100-day SMA touched in the aftermath of US CPI release on Friday, the yellow metal attempted a move higher but failed to break through 3-day old trading range. A weaker greenback provided the initial boost to dollar-denominated commodities, including gold. Further upside, however, was limited as market focus remains on the US Dollar's next directional move after the US Federal Reserve and Bank of Japan announce their respective monetary policy decisions on Wednesday.

Although the US central bank is not expected to announce a rate-hike this time but hawkish guidance during the subsequent press conference would clear the leave doors open for an eventual hike in December, which would eventually boost the US Dollar and weight heavily on non-yielding previous metal. 

Technical levels to watch

Immediate upside resistance is pegged at $1318 and $1322 levels above which the commodity seems to extend its recovery towards $1330 strong resistance. Meanwhile on the downside, support is seen at $1310 level, which if broken should drag the metal towards 100-day SMA strong support near $1305 region. A clear break below 100-day SMA would turn the commodity vulnerable to continue drifting lower in the near-term.