Gold inter-markets: consolidates before resuming its upward trajectory

Wednesday's decision by the Fed to leave interest-rates unchanged provided the required momentum for Gold to climb for the third consecutive session to a 2-week high level of $1337. 

Although the outcome was on expected lines, it exerted intense selling pressure around the greenback, as depicted by a sharp slide in the USD/JPY major, and boosted demand for dollar-denominated commodities - like gold. The accompanying rate-statement and economic projections did point to likelihood of a rate-hike before the end of this year but markets seems to have ruled out possibilities of a move in November, given the proximity of US election to the Fed's next policy meeting. The expectations were reaffirmed by a steep decline in the longer-term (30-years) US Treasury bond yields. 

Moreover, continuous drop in the Volatility Index (VIX) was seen supportive for risk-on rally across the board, lifting the broader US equity index (S&P 500) and provided an additional leg of up-move for the yellow metal.

As the dust settled, a tepid recovery bounce in the USD/JPY major capped further up-move and has confined the precious metal within a narrow trading range around $1335 region. The current range-bound trading action could be categorized as a consolidation phase before the next leg of movement. With VIX, 30-year Treasury bond yields and up-tick in S&P 500 already supporting further up-move, renewed selling pressure around the USD/JPY pair is likely to trigger a fresh leg of appreciating move for the metal possibly towards its next major resistance near $1350 region.