Gold closes higher, but off 5-week highs

Gold extended gains into a fifth consecutive day on Tuesday, underpinned by a flight to safety amid Brexit fears and ahead of the Federal Reserve decision on monetary policy.

Gold rose slightly and closed at $1,288.10 an ounce, having pulled back from a 5-week peak of $1,289.90/oz.

“Gold upward potential will face a major challenge this Wednesday, as most of this buying gold enthusiasm has been fueled by speculation that the Fed will remain on-hold. In that case, the commodity will probably retest its year's high around $1,303.00, and even extend higher, should the central bank's tone is dovish,” said Valeria Bednarik, chief analyst at FXStreet. “A surprise rate hike, on the other hand, can see the commodity plummeting below the 1,250.00 mark.”

Bednarik notes that the upside remains favored with immediate resistance levels at 1,287.10, 1,296.65 and 1,303.65. On the other hand, support levels could be found at 1,217.20, 1,263.80 and 1,256.65.