In a new report, UBS analyst Joni Teves takes a look at the impact that the FOMC could have on gold prices. According to Teves, a pullback in gold prices could be healthy for the market.

“Some more consolidation at this point should be healthy for gold given strong price gains year-to-date, a considerable increase in Comex positioning and the rebound in risk,” she explains.

So far this year, the SPDR Gold Trust (ETF) GLD 0.2% has rallied 16.1 percent without logging a significant pullback.

Teves believes that markets were not expecting another rate hike from the FOMC this week. However, she believes that risk for gold is currently skewed to the downside, as positive U.S. data did not allow the Fed will not sound too dovish in its commentary. Any downside risk to gold could be…

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