• Gold prices edged down on Tuesday as the dollar firmed, with focus shifting to the U.S. Federal Reserve which is expected to hike interest rates and signal three more increases this year at a two-day meeting that kicks off later in the day.
Spot gold had fallen 0.1 percent to $1,315.86 per ounce at 0108 GMT. U.S. gold futures for April delivery dropped 0.2 percent to $1,315.80 per ounce.
The dollar index against a basket of currencies was up 0.1 percent at 89.883. It slipped 0.5 percent on Monday.
• The Federal Open Market Committee (FOMC), the U.S. central bank's policy-setting group, will meet on Tuesday and Wednesday.
• The Trump administration is expected to unveil up to $60 billion in new tariffs on Chinese imports by Friday, targeting technology, telecommunications and intellectual property, two officials briefed on the matter said Monday.
• European Central Bank policymakers are shifting their debate to the expected path of interest rates as even some of its most dovish rate setters accept that lucrative bond buys should end this year, sources close to the discussion said.
• Global economic growth is facing the risk of inward-looking policies and protectionism which must be avoided, European Economics Commissioner Pierre Moscovici said on Monday on the sidelines of a meeting of world financial leaders in Argentina that discussed trade.
• EU and British negotiators have agreed draft Brexit treaty texts dealing with a transition period and other issues and have a broad agreement on Irish border arrangements although some details are outstanding, a senior EU diplomat said on Monday.
• Asian shares fell on Tuesday as investors dumped high-flying U.S. technology stocks on fears of stiffer regulation as Facebook came under fire following reports it allowed improper access to user data.
Russia raised gold holdings by 22.80 tonnes to 1,880.53 tonnes in February, 2018, according to IMF data.
• The latest data from the Commodity Futures Trading Commission (CFTC) showed that speculative traders on the Chicago Mercantile Exchange reduced their net-long positions in gold to 167948 contracts, from 183823 a week earlier.
The gold market tends to weaken going into the Fed meetings, at which a rate hike is expected, so we will probably start the week in a similar environment. Also keep in mind that this type of pressure usually creates a temporary reaction and once the Fed makes the actual announcement, XAU/USD may reverse its course - unless the statement sounds more hawkish than what the market is expecting. From a technical perspective, bearish weekly close (the lowest weekly close since late December) also suggests more selling pressure early this week. The market is trading below the 4-hourly Ichimoku cloud; plus, the Tenkan-sen (nine-period moving average, red line) and the Kijun-sen (twenty six-period moving average, green line) are negatively aligned on both the daily and the 4-hourly charts.
To the downside, the bears have to clear nearby supports such as 1308/5 and 1301/0. If the market successfully dives below the bottom of the daily cloud, which also happens to be the 50% retracement of the bullish run from 1236.40 to 1365.95, it is quite possible that the XAU/USD pair will extend its losses, targeting the 1287/3.50 region. On its way down, expect to see some support in the 1294/2 area, the top of the weekly cloud. The bulls, on the other hand, have to lift prices above 1322.50 to tackle the next barrier in the 1328/5 area. A daily close above 1328 would pave the way for a test of 1334.32-1332 (or even 1336-1335.50). Beyond there, the 1347/5 area stands out as a solid technical resistance.
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