Gold experienced significant declines since the start of the week
Officials from the Federal Reserve have issued warnings about the possibility of further interest rate increases.
A Federal Reserve member stated that they remain uncertain as to whether the battle against inflation has concluded.
The Federal Reserve is committed to restoring inflation to the bank's targeted levels.
Markets are eagerly anticipating the release of personal consumption expenditure data in the United States this week.
Economic events that impact movements of the US dollar
Gold prices have experienced a notable decline for the second consecutive session. This decline is attributed to the strength of the US dollar against most major currencies and commodities, particularly following the Federal Reserve's recent hawkish stance and the increase in US bond yields.
Several officials from the Federal Reserve have issued warnings about potential further interest rate hikes, expressing uncertainty as to whether the battle against inflation has concluded.
Austin Goolsbee, a Federal Reserve member, stated that it appears interest rates should remain elevated for a longer duration than anticipated by the markets. He emphasized that the greater risk lies in inflation persisting above the target, and underscored the Federal Reserve's commitment to restoring inflation to the bank's targeted levels.
These statements have heightened expectations of additional US interest rate hikes during upcoming Federal Reserve meetings, along with an extended period of the Federal Reserve's tight monetary policy. Consequently, the US dollar index has strengthened.
Market participants eagerly await the release of personal consumption expenditure data in the United States this week, which is the preferred inflation measure for the Federal Reserve. Additionally, they are keen to hear insights from Federal Reserve Chair Jerome Powell.
Regarding trading, gold commenced the second session of the week with a modest decline, trading near $1913 per ounce.
Key technical levels that may influence gold movements
Gold continues to move within a medium-term descending channel. Despite attempting to surpass the upper boundary around $1950.00, it failed and subsequently resumed its downward trajectory. At present, it is trading around $1913.77, and there is a high likelihood that the decline may extend to test the support level at $1900.00. A breach of this level could lead to further downside testing of the $1885.00 level.
However, if gold manages to rise from the current levels, it may encounter resistance at $1930.00. A successful breakthrough above this level could contribute to additional upward momentum, potentially testing a stronger resistance level around $1953.00.