Gold price turns positive for the third straight day, though the upside potential seems limited.

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• Gold price turns positive for the third straight day, though the upside potential seems limited.
• Geopolitical risks and China’s economic woes continue to lend support to the safe-haven metal.
• The emergence of some USD buying to cap any further gains ahead of the FOMC policy decision.

Gold price (XAU/USD) attracts some dip-buying during the early part of the European session on Wednesday and turns positive for the third successive day, though any meaningful upside still seems elusive. A further decline in the US Treasury bond yields, along with persistent worries about the deepening Middle East conflict and China’s economic woes, turn out to be key factors lending some support to the safe-haven precious metal. That said, a modest pickup in the US Dollar (USD) demand might cap the upside for the commodity.

Traders might also refrain from placing directional bets and prefer to wait on the sidelines ahead of the crucial FOMC policy decision, due later today. The Federal Reserve (Fed) is widely expected to keep its key interest rates unchanged. Hence, the focus will be on the accompanying monetary policy statement and Fed Chair Jerome Powell’s comments at the post-meeting press conference. Investors will look for cues about the timing of the first interest rate cut, which will drive the USD demand and provide a fresh impetus to the Gold price.

The overnight failure to find acceptance above the $2,040-2,042 supply zone and some follow-through selling below the 50-day Simple Moving Average (SMA), currently around the $2,030-2,029 region, will expose the $2,012-2,010 support zone. This is followed by the $2,000 psychological mark, which if broken decisively will be seen as a fresh trigger for bearish traders and pave the way for deeper losses. The Gold price might then accelerate the decline towards the 100-day SMA, currently near the $1,979-1,978 area, before eventually dropping to the very important 200-day SMA, near the $1,964 region.

On the flip side, bulls need to wait for acceptance above the $2,040-2,042 static resistance and a subsequent move beyond the overnight swing high, around the $2,048-2,049 region, before placing fresh bets. Given that oscillators on the daily chart have just started moving into the positive territory, the Gold price could then accelerate the positive move towards the next relevant hurdle near the $2,077 zone. The momentum could extend further and allow bullish traders to aim back towards reclaiming the $2,100 round-figure mark.

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