Gold stays little changed today just above $1,730
The dip in gold on Friday was defended closer to $1,700 and that saw price rebound rather modestly back towards $1,720-30 levels, which is pretty much where price action is settling so far this week ahead of the FOMC meeting tomorrow.
Buyers are keeping near-term control as price holds above the key hourly moving averages but short-term resistance around $1,740 continues to keep a lid on the upside for now.
As much as gold looks to be trying to form a base in and around $1,700 in the past two weeks, a lot of what comes next for gold will depend on what the Fed does or does not choose to communicate in tomorrow's policy meeting.
Gold ETFs were trimmed yesterday once again for a 21st straight day of declines, marking its longest streak since 23 December 2016. In total, ETF positioning has dropped by nearly 5% this year and is at the lowest since 18 June last year.
Here's a look at how SPDR gold ETF holdings have been faring:
That is pretty much setting the tone for gold as investor appetite just isn't there at the moment. However, with the recent positioning adjustment, dip buyers may be interested again if the Fed so chooses to keep a more dovish stance tomorrow.
As such, an SLR extension and the dot plots will go a long way in revealing the degree of dovishness at the Fed and that might breathe a fresh lease of life in gold.
Otherwise, if Treasury yields and real yields in the US receive more confirmation to push higher, the lack of investor appetite is more than likely going to create another flush lower in gold prices - putting the 8 March low @ $1,676.89 in jeopardy.
