Gold to aim at 1,100 before Fed meeting

Gold has been inching lower since the beginning of this month; however, volatility and the pace of decline stood at quite low levels. On Friday the yellow metal touched the long-term trend-line just below 1,100, but recovered by the end of trading. We see the bullion hovering in sideways trend until Thursday's Fed interest rate decision, even though a slight bearish move is possible. This scenario is supported by daily, weekly and monthly technical indicators, but we assume the support area at 1,087-1,100 will be able to withstand initial bearish pressure.

SWFX positive sentiment with respect to gold was unchanged over the weekend as bullish traders are in the majority with 59% of all open positions.