Gold firm above $1160 as investors brace for Fed rate hike

Gold held on to minor recovery gains on Wednesday but remained confined within narrowing weekly trading range as investors awaited the outcome of the FOMC policy meeting later during the day.

Currently trading around $1160 level, the prevalent cautious sentiment, ahead of the key event risk, is seen benefitting the metal's safe-haven investment appeal. Moreover, a mildly weaker greenback, in wake of disappointing US monthly retail sales data, is also extending support to dollar-denominated commodities - like gold.

With markets already pricing-in a 100% chances for an interest rate hike by 25 bps, focus would be on the details in the accompanying rate-statement. Hawkish Fed outlook would point to faster Fed rate-tightening cycle and should attract fresh selling interest around the non-yielding precious metal.

Technical outlook

Sustained momentum above $1165 immediate resistance is likely to get extended immediate towards $1170 intermediate resistance, en-route to $1179-80 strong hurdle. On the flip side, weakness below $1155 immediate support is likely to drag the commodity back towards multi-month lows support near $1151 level before heading towards its next support near $1140 region.