Gold extended gains climbing once again above the psychologically important $1,800 level as markets awaited the start of a 2-day Fed monetary policy meeting later in the day, amid speculation that the central bank could implement fresh stimulus to bolster the US economy. Wall Street investment bank Goldman Sachs said in a report earlier that it sees “a high probability” that the FOMC will announce further easing steps at the conclusion of the meeting. The Fed will likely announce plans to lengthen the average maturity of its portfolio, with sales of relatively short-dated Treasuries and purchases of relatively long-dated Treasuries. The report added that, The easing tool the Fed used last year - balance sheet expansion - does not look like a realistic option for the upcoming FOMC meeting. Gold futures found further support after ratings agency S&P’s downgraded Italy’s sovereign credit rating by one notch to A from A+ and kept its outlook on negative, citing weakening economic growth prospects and higher-than-expected levels of government debt. Now technically market is trading in the range as RSI for 18days is currently indicating 58.85, where as 50DMA is at 26445.86 and gold is trading above the same and getting support at 27713 and below could see a test of 27387 level, And resistance is now likely to be seen at 28232, a move above could see prices testing 28425.

Trading Ideas:

Gold trading range is 27387-28425.

Gold extended gains climbing above the psychologically important $1,800level ahead of Fed meet.

Sentiment on gold remained upbeat after the WGC said that gold demand in China could rise 10% this year.

SPDR gold trust holdings gained by 0.30 tonnes to 1252.21 tonnes