Gold Correction ContinuesGold prices are looking vulnerable this week amidst a bout of fresh USD strength ahead of the FOMC later today. Yesterday’s November CPI reading showed that inflation slowed to 3.1% annually from 3.2%, in line with expectations. While still headed in the right direction, the deflationary momentum we’ve seen across recent months has clearly slowed, serving as evidence of the Fed’s warning that the last mile of the journey back to 2% inflation will be the hardest. As such, there is plenty of attention on the Fed today with opinions divided over what we can expect.Hawkish Fed RisksGiven the slowdown in the deflationary move and with November jobs data surprising to the upside, the argument for near-term rate cuts appears to have softened. If the Fed is seen sending a strong signal today that rate cuts will not be coming in the early part of 2024, reaffirming its commitment to tackling inflation, this should see some further strengthening of USD near-term, weighing on gold prices. Special attention will be on the latest dot plot projections. With the market currently pricing in over 100bps of easing next year, any undershooting of this level should again translate into a firmer USD, putting pressure on gold prices. Consequently, only a dovish surprise in today’s guidance and dot plot forecasts wouldTechnical ViewsGoldThe pull back in gold from the 2069.41 level has seen the market trading back down to test the 1973.51 level support. This is a key near-term pivot which, if broken, will open the way for a much deeper move down towards 1871.04 in line with bearish momentum studies readings.