• Fears of Fed rate hike underpins the precious metal’s bullish move.
• Geopolitical tensions of Russia – Ukraine also extends support to the Bullion.
• Downbeat economic forecasts by the International Monetary Fund also favors the bullish move of XAU/USD.

Gold is trading upside against the greenback during Wednesday ahead of Fed verdict. This move can be linked to market anxiety ahead of a U.S. central bank decision on the pace of policy tightening, Meanwhile geopolitical concerns over Ukraine kept the yellow metal supported near the previous session’s 10-week high.

The Federal Reserve’s two-day meeting will end later in the day, and Market expects in a quarter-point tightening for the March meeting, plus three more for 2022. A senior International Monetary Fund official said on Tuesday “Expected rate hikes by the Fed may delay emerging Asia’s economic recovery and keep pressure on policymakers to guard against the risk of capital outflows.”

Market ignored softer US CB Consumer Confidence with a reading of 113.8 Vs forecast of 112.7,  which in turn favored gold buyers.

Meanwhile, U.S. President Joe Biden has said that he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine, as Western leaders stepped up military preparations and made plans to shield Europe from a potential energy supply shock. This in turn increases geopolitical concerns further.

Elsewhere, A top International Monetary Fund official said on Tuesday that An escalated conflict between Russia and Ukraine would likely further increase energy costs and commodities prices for many countries, keeping headline inflation rates elevated for longer.

First Deputy Managing Director Gita Gopinath told Reuters the situation now was far different than in 2014 when Russia annexed the Crimea region of Ukraine, and energy prices fell quite sharply amid low demand and ample shale gas supplies.

Furthermore, Official Gita Gopinath conveyed downbeat economic forecasts the previous day as Omicron spreads. “We project global growth this year at 4.4%, 0.5 percentage point lower than previously forecast, mainly because of downgrades for the United States and China,” said IMF’s Gopinath per Reuters.

Gold buyers will keep a watch on the Fed verdict with the hope of rate hike, Meanwhile  It cannot be ignored that recent doubts over the monetary policy due to Omicron might make the Fed Powell to sound cautiously optimistic which might be favorable to the Gold.

XAU/USD 4 Hour Chart:

Support: 1837.0 (S1), 1826.4 (S2), 1818.0 (S3).

Resistance: 1856.0 (R1), 1864.4 (R2), 1878.0 (R3).

Amidst all the catalysts favoring the yellow metal ahead of Fed’s verdict, we expect a bullish trend for XAU/USD.