Gold remains stuck in tight range above $1300

After dropping towards the $1300 handle amid an improved market sentiment and a stronger greenback, the ounce troy of the precious metal is having a difficult time finding direction on Tuesday. As of writing, the XAU/USD pair was trading at $1310, gaining 0.2% on the day.

The pair's small gains today seems to be a product of a modest selling pressure witnessed on the buck. Following a batch of mixed macroeconomic data from the United States, the US Dollar Index is struggling to recover its daily losses. According to the data released by the Bureau of Economic Analysis, the current account deficit in the U.S. rose to $123.1 billion in the second quarter of 2017 from $113.5 billion in the first quarter of 2017. On the other hand,  import prices recorded their biggest monthly increase since January at 0.6%. 

The risk sentiment, which usually impacts the price action of the traditional safe-haven gold, is also unclear today. In fact, major equity indexes in the U.S. started the day virtually flat as investors are gearing up for tomorrow's important FOMC meeting. 

"Still, over the past week or so, the market has moved to recognize a somewhat greater chance of another Fed hike by the end of the year.  This effectively means the December meeting.  The CME's calculation puts the odds at 55.8%, interpolating from the Fed funds futures strip," analysts at BBH noted in a recent report. A heightened expectation of a December rate hike at the end of tomorrow's meeting could allow the greenback to gather strength against its peers.

• FOMC meeting gets underway today - BBH

Technical outlook

The CCI indicator on the daily graph recently turned north below the -100 mark, suggesting that the bearish momentum is losing strength. A daily close below the critical $1300 (psychological level) handle could open the door for further losses towards $1292 (Aug. 28 low) and $1284 (Aug. 24 low). On the upside, resistances could be seen at $1319 (Sep. 18 high), $1327 (20-DMA) and $1334 (Sep. 14 low). 

Today's data from the U.S.:

• US: Privately-owned housing starts in August were at 1,180,000, 0.8% below July estimate
• US: Import prices increased 0.6 percent in August
• US: Current-account deficit increased to $123.1 billion in the second quarter of 2017