Gold is once again back through the $1200 mark in today’s trading session and seems to have solid support at this level as anytime it has fallen below this critical mark buyers have stepped in and pushed it right back up.

This may be a good sign for the precious metal as such support gives the impression that investors are positioning themselves for a break to the upside.

Not a lot of movement is expected before this week’s interest rate decision by the US Federal Reserve as a rate hike is more than 90 percent priced into the market.

The following monetary statement on the other hand is a different story and if the Fed comes out dovish against any further rate rises this year the gold price could really take off.

Even if the speech is on the bullish side for further rate hikes some say this will only support the US dollar further in the short term and when the perception of higher rates finishes gold will finally get it’s chance to rally.

Higher interest rates in the US is usually negative for gold as investors chase the greenback for higher returns.

“In the short run, the effects of strong dollar, higher rates dominate,” said Francisco Blanch, head of global commodities research

 “But in the long run, a huge U.S. government budget deficit is pretty positive for gold.” He added.

When gold does make it’s next major move upwards some predict a gain of around 20 percent from current prices and especially if the trade wars between the US and China escalate further.

There is also the possibility that Donald Trump’s republican party may loose the upcoming elections on November 6th which will also benefit gold.

“When it comes to a long-term perspective, I believe I am still holding bullish views about the precious metal,” said Naeem Aslam, chief market analyst with Think Markets.

“Midterm U.S. elections, geopolitical tensions around the globe and most importantly, the deteriorating situations around the U.S. fiscal balance are all going to provide a strong tailwind for the metal to continue to move higher. It could easily touch the level of $1,500 by next year.” He added.