On Wednesday, gold prices bounced back from a one-month trough on weaker dollar and Treasury yields. The greenback steadied near a two-decade peak and made the bullion more attractive for holders of rival currencies.

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Meanwhile, the benchmark 10-year yields eased from a multi-year high and lowered the opportunity cost of owning the yellow metal.

Spot gold is currently trading at $1,818.29 per ounce as of 0819 GMT.

Gold’s recovery came ahead of a potentially aggressive rate hike by the Federal Reserve. The central bank is expected to raise the interest rate again by 0.5 percentage points. But a resurgence of producer and consumer prices in May led to speculation for a 75-basis-point hike. The last time the Fed raised interest rates by that much was November 1994. The Federal Open Market Committee will announce its decision today at 1800 GMT.

Experts have different opinions on such an aggressive step by the Fed. Some say it indicates rising panic among policymakers. Others argue that it is justified since the central bank needs to react strongly to combat inflation. Investors have raised their bets for a 75-basis-point hike, which fueled selloffs across world markets.

AirGuide corporate advisory director Michael Langford argued that gold prices would rally before the Fed announcement. But after that, the bullion will continue its downward trend. He predicted the metal to go below $1,800 per ounce.

FXStreet senior analyst Dhwani Mehta agreed that the fate of gold hinges on a hawkish or dovish rate hike by the Fed. She considers a 75bps hike as hawkish and 50 bps as dovish. If the central delivers a dovish hike, that could lower dollar demand and support gold prices.

The four-hour price chart shows that the bullion is challenging the upper boundary of a wedge formation at $1,817. If gold closes above that level, it could break the wedge pattern and retest $1,830. However, the 14-day Relative Strength Index remains below the midline and the 200-SMA has crossed the 100-SMA, indicating further downside. Mehta sees immediate resistance at $1,850 and then $1,805.

DailyFX strategist Michale Boutros argued that gold could collapse ahead of the FOMC decision. With the expected aggressive rate hike, the bullion could fall below the June opening range and break to fresh monthly lows today. He noted that gold slipped into the $1,818-$1,827 support zone. A close below that level could push the metal to the yearly low-week close at $1,791. The IG Client Sentiment Index indicates that gold prices may continue to fall.

In a related development, the holdings of the largest gold-backed exchange-traded fund in the world, SPDR Gold Trust (GLD), fell 0.46% to 1,063.94 on Tuesday. It reflects current market sentiment.