GOLD rose a smidgeon on Wednesday, as investors awaited the outcome of the US Federal Reserve’s policy meeting, which could provide insight into the timing for the reduction of stimulus in the world’s largest economy. The opportunity cost of owning non-interest-bearing gold would rise if interest rates were to increase in the future.

Traders were also keeping an eye on events involving China’s debt-laden property giant Evergrande, which announced on Thursday that it would pay some bond interest that was due, bringing some respite to stocks.

According to a poll of 32 market players, the Federal Reserve will announce a reduction in its monthly asset purchases of $120 billion for November, and begin tapering in December. The Fed is likely to reduce monthly purchases by $15 billion. The first rate increase isn’t expected until the end of next year.

Many predicted that the news would be announced at the FOMC meeting in early August, just at the time when the spread of the delta variant of the coronavirus became a problem. Only nine people believe that it will happen on Wednesday, compared to 17 who believe it will happen in November.

Despite the concerns, the market expects no rate increases until the end of 2022. Indeed, since the more upbeat spring days, when reopening was gaining traction, expectations for rate hikes have dwindled.

In April, the survey found that nearly two quarter-point rate hikes were expected next year. Only one is completely priced for now. This could be because the spread of the delta variant caused respondents to lower their growth expectations for the year.

 GOLD is currently trading in a positive trend at $1,772, with the next support at $1,771. An intraday pivot point is extending this support level, and gold has the potential to explore beyond it. As a result, the next immediate resistance for gold remains at 1,781 and 1,794.

The support level for the precious metal remains at around 1771, which has been stretched by a daily pivot point. A violation of the 1,771 support level opens the gold price to 1,760 on the bearish side. Overall, the FOMC will continue to be the key focus, as it may assist in influencing future moves in the XAU/USD today. Good luck!