Gold is testing $1,100 again

Gold is testing $1,100 again, a level which had held on both Wednesday and Friday last week. There is currently good buying just above $1,100. However, while support is strong at $1,100, we believe that the bias now lies to the downside ahead of the US Fed’s next monetary policy move. While we expect no rate change, there may be more signals of future monetary tightening.
Initial tightening is unlikely to come via an interest rate hikes, but rather in the form of liquidity withdrawal. The dollar may find support ahead of the FOMC meeting. Less liquidity would also imply less support for gold.

Gold support is at $1,100 and $1,089; resistance is at $1,109 and $1,116.

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