Gold has now failed to find a direction for the past 3 trading sessions as investors remain wary about taking positions in the precious metal ahead of this week’s Federal Reserve board meeting which could determine the fate of gold for the foreseeable future.

With the market mow pricing in a 100 percent chance that the Fed will increase rates on Wednesday, the main focus will be on the following monetary statement, and how many more rate hikes the central bank has planned as the year unfolds

The consensus floating around is the Fed will signal 3 more rate hikes are on the horizon this year taking the total to 4, but some predict they will take a softer tone in light of recent events which may give a reason for gold to break out to the upside.

“The probability of another rate hike is being priced at nearly 100%, noted Bart Melek, head of commodity strategy at TD Securities

 “Given the current equity market weakness, recent lackluster economic data and trade war rhetoric getting louder, we judge that a hawkish tone is not warranted at this time.

Mr Melek also noted that US President Donald Trump’s trade tariffs will benefit gold and we may be in for a rally towards the highs seen near the end of January once the dust settles.

 Protectionism would no doubt be perceived to hurt global growth as the international flow of goods shrinks, could be very helpful to gold. Weaker-than-expected global growth would lower real interest rates and be a negative for equities, which should get the yellow metal to move above the current trading range to test recent highs of above $1,366 he added.

In a final note directed at short term traders Mr Melek noted that gold followed a similar pattern after the 5 previous rate hikes from the Fed and there is a strong possibility the same will happen this time around.

 “Gold sold off ahead of the move, (an increase in interest rates) only to rally strongly once the rate increase was announced,” Melek noted.