Gold prices are hovering near their lowest level in the last six months. News about the Federal Reserve’s decisions and US economic figures make gold investors nervous. The Fed’s possible interest rate hike reduces the shine of gold. Meanwhile, macro data that will have an impact on prices are expected.
Gold prices are in a dilemma in an environment where US interest rates are rising
cryptokoin.comAs you follow from , the yellow metal dived hard below $1,900. The shiny metal fell to a six-month low early Wednesday. Gold has stabilized after this significant decline and continues to hover near these levels. Root causes? A stronger dollar and the current trajectory of Treasury yields. Investors eagerly await U.S. economic numbers, hoping for insight into the Federal Reserve’s interest rate decisions.
Shiny metal is losing its appeal!
Gold’s appeal has diminished for three consecutive sessions. The main reason for this is speculation that the US Federal Reserve may maintain high interest rates. These speculations were further fueled by expectations for US inflation data. As a result, investors seeking shelter turned to the dollar. This made gold more expensive for international buyers.
US interest rates put pressure on gold prices
The upcoming release of the U.S. personal consumption expenditures (PCE) index, a key inflation measure for the Federal Reserve, is eagerly awaited. A decline in inflation could give gold respite and dampen expectations for tighter monetary policy. On the contrary, it is possible that stronger inflation data could worsen gold’s challenges.
Federal Reserve’s stance
Minneapolis Fed President Neel Kashkari hinted at the possibility of a “soft landing” for the US economy. But he also raised the possibility of significant interest rate hikes to fight inflation. Despite these challenges, gold finds solace in stable physical demand, especially from central banks and China. This provides some support for gold prices.
Market monitoring and outlook
The market’s eyes are on the US GDP growth figures and unemployment claims that will be announced soon. However, the looming possibility of a US government shutdown and concerns about interest rates point to a short-term bearish trend for gold.
Technical analysis of gold prices: Possible scenario is continued decline
Market analyst James Hyerczyk said: He evaluates the technical picture of gold as follows. Spot gold currently trading at 1,874.655he’s tired. Like this, It is below both the 200-Day and 50-Day moving averages. this too indicates a downward trend. The 14-Day RSI is at 30.16, indicating oversold market conditions. This points to a potential reversal or pullback in the near term.
Meanwhile, the market is below the defined trend line support at $1,911.45. Moreover, it is trading below the previous support levels at $1,901.240 and $1,889.369. Considering these factors, the most likely scenario for spot gold prices is predominantly downward.
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