The biggest event yet to come on Wednesday through the Fed decision expecting for $10 billion tapering. The yellow metal has already factored it, rallied towards 2-month's high. Chinese physical demand ahead of lunar New year celebrations and weakness in the US dollar makes gold more attractive. Gold made a 5-week upmove in the weekly chart. The FOMC is scheduled to announce its latest monetary policy decision on Wednesday. Expectations suggest a further $10 billion cut in its bond purchasing program. Due to slowdown in the Chinese economy rumours spread Fed would scale back its bond purchasing further.
Thursday, the advance reading on the fourth quarter US GDP is scheduled to be announced. The US economy registered a growth of 4.1% in Q3, 2013. The US GDP is expected to show the growth of 3.2% annualised rate.
In the technical front, gold completed its first ascending wave. We can observe positive divergence in the hourly chart. Gold is trading at the level of $1,256. For intraday perspective, we recommend buying with sl at $1,254, targets of $1,260 and $1,263. But in the daily chart, the stochastics gave a negative divergence indication. Sell on further upmove with the targets of $1,250, $1,244, and $1,233, cmp at $1,256.
Support: $1,254, $1,244.
Resistance: $1,279.
