Gold moves sideways in upper half of daily range above $1300

• Wall Street posts modest gains in early trade.
• US Dolar Index turns flat near 96.50.

Following a drop below the $1300 mark earlier in the day, the XAU/USD pair reversed its course and advanced to a daily high of $1306.70. With the trading action turning subdued amid a lack of fundamental drivers in the second half of the day, the pair started to move sideways in the upper half of its daily range and was last seen trading at $1305.50, adding 0.25% on a daily basis.

The broad USD weakness in the first half of the day helped the pair gain traction. After losing nearly 1% last week, the US Dollar Index edged down to its weakest level in two weeks. However, with investors not looking to make large bets ahead of this week’s critical FOMC meeting, the DXY retraced its daily drop and was last seen flat on the day at 96.50.

Meanwhile, major equity indexes in the U.S. started the day a little above last week’s closing levels but couldn’t gather enough momentum to reflect positive market sentiment as stock markets are also focused on the Fed’s decisions.

“Citi analysts expect the Fed to change the median “dot” to indicate one hike only in 2019 but with hawkish risks that it keeps them unchanged at two,” Citibank analysts said in a recently published article. “End of balance sheet reduction may also be announced and the meeting is also likely to see changes to the Fed’s assessment of the US economy.”

Technical levels to consider