Gold remains corrective after gains stalled shy of the important $1400 zone early in the week. There has been some unwinding of the safe-haven play as Ukrainian situation seems to have stabilized — at least for the time being — with the Russian annexation of Crimea.
The results of the fist FOMC meeting under the stewardship of Janet Yellen will be announced at 14:00 EST. The Fed is widely expected to hold steady on policy, including an additional taper of $10 bln per month to asset purchases. The Fed’s latest economic projections will be released as well.
At 14:30 EST, Fed chair Yellen will meet the press for the first time. There is some expectation that she will attempt to clarify guidance during the presser;, and while every word she utters will closely scrutinized, no significant deviation from Bernanke-era guidance is anticipated.
While the dollar has rebounded modestly, the tone is more consolidative than corrective. The overall bias remains dollar negative. Meanwhile the euro remains generally well bid ahead of the 1.4000 level.
The fundamental picture for gold remains positive. That includes expectations that tensions surrounding the Ukrainian situation will remain high. This pullback has relieved the short-term overbought condition somewhat, while the longer-term technical tone is still broadly supportive.