Gold is up by 0.2% as price holds above $1,500
Despite a bit of a more optimistic risk tilt at the end of last week, gold is keeping more steady as price continues to trade above the $1,500 handle.
Of note, price is keeping above a break of the trendline resistance as buyers continue to flirt with a break of the narrowing wedge on the daily chart - as seen above.
However, as mentioned last week, without clear catalysts and fundamentals, the technical break may not be as "clean" until we observe a break above the swing region resistance around $1,512-19 levels. That remains the case as we begin the new week as well.
Looking ahead, what is next for gold?
US-China trade talks will continue be a key risk factor affecting sentiment and from a technical perspective, buyers will have to try to keep price above $1,500 to feel more comfortable of any potential upside momentum.
However, the key risk event in my view for gold this week will be the FOMC meeting. The Fed is due to deliver another rate cut and that should solidify the narrative of further global easing among central banks.
A 25 bps rate cut is already ~91% priced in - from Fed funds futures - so instead, it is all about whether or not we will see more rate cuts by the Fed going into 2020.
Any communication regarding that matter from the Fed this week will be key in terms of driving trading sentiment in gold moving forward.
That said, I reckon the Fed will keep playing it coy and keep markets guessing just as much as before the meeting.
As such, gold traders may have to allude to other events i.e. US-China trade headlines or technical levels for more clues on how to proceed next after the Fed.
