Gold recovers after dipping to a two-week low ahead of the Fed's meeting

Courtney Goldsmith
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Gold prices could be heading lower after the Fed's meeting (Source: Getty)

Gold prices fell to a two-week low late last night as safe haven assets retreated.

The yellow metal dropped to $1,307 an ounce as the US dollar lifted. It has since recovered slightly, rising 0.1 per cent to $1,312.10 per ounce at the time of writing.

"Gold was under intense selling pressure on Monday, as the risk-on mood encouraged investors to offload safe-haven assets. Stabilizing oil prices and easing North Korean tensions have both played a leading role in gold’s sharp decline, which was trading around $1,308 as of writing," said Lukman Otunuga, research analyst at FXTM.

Read more: Gold prices slip further as the US dollar steadies

"This tug of war between bulls and bears seems to be coming to an end, with a break below $1300 simply handing control over to sellers."

Investors are now looking to the US where the Federal Reserve is beginning a two-day meeting. The Federal Opern Market Committee is expected to announce the timetable for trimming its blance sheet, which would be a hawkish move.

"A hawkish Fed reaction could send the ounce below the $1,300 mark, while a dovish surprise should attract the dip buyers at, or below the $1,300 mark," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

Read more: Gold is under-owned by investors… for now

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