In the near term, the yellow metal could continue to suffer losses as the American currency may gain support from the upcoming Federal Reserve’s two-day meeting that begins today. The markets expect to receive some “hawkish” signals from the policy makers who may highlight their readiness to hike in June.
Another source of concern for gold bulls is the Friday’s nonfarm payrolls report where the wages data will be in the spotlight. Positive numbers could send the greenback even higher and therefore put the metal under additional pressure.
As for technicals, spot gold closed below the key 100-DMA and now threatens the next major support at $1,310. Should the yellow metal fail to hold above this level, we could see a dip towards $1,307.