Gold prices witness significant downturn

Impactful economic events on the US dollar and gold

Amidst the rise of the US dollar index, the precious metal has experienced a decline, approaching its lowest level in six weeks. This upward trend is accompanied by increasing US bond yields, driven by growing expectations that the Federal Reserve will maintain high interest rates for an extended period until 2024.

Investors are eagerly anticipating the release of minutes from the recent meeting of the US central bank, which was held on July 25-26. This meeting resulted in the Federal Reserve resuming its rapid interest rate hike path after a temporary pause in June.

Earlier, Mary Daly, a Federal Reserve member and President of the Federal Reserve Bank of San Francisco, stated that the central bank still has more work to do. She mentioned that Federal Reserve officials have yet to decide on the timing of interest rate increases.

These comments have sustained expectations for further interest rate hikes by the Federal Reserve during the remaining months of this year, leading into a prolonged period of monetary tightening.

In terms of trading, the precious metal began the week with a slight decline, trading near the level of $1907.00 per ounce

Key technical levels influencing gold's movement

Gold has dipped below the $1930.00 level, extending its decline to $1907.00. There's a likelihood of further decrease with a potential test of the $1900.00 level. A break below this level might initiate a decline towards the support level of $1890.00.

Should gold's decline persist and it breaks below the $1890.00 support level, it could amplify downward pressure, potentially leading to a movement towards the $1850.00 level.

The resistance for gold is approximately at $1930.00. If it manages to surpass this level and maintain prices above it, this achievement could trigger additional upward movement, putting the resistance levels of $1948.00/$1950.00 to the test