On Monday morning, gold price tumbled to $1,791 per ounce, amidst speculation of a faster than anticipated rate hike by the Fed. Goldman Sacks economists predict that the Fed will raise interest rates four times within 2022. Until recently, economists expected three rate hikes, but recent data in US inflation and jobs, along with a marked hawkish shift in the Fed’s monetary policy, have led experts to speculate that rate hikes will be more frequent than previously expected.
Tighter Fed bank policy decreased fiscal stimulus, and rising real interest rates are all negative markers for gold, which plummeted to $1,791 per ounce on Monday morning. Gold price corrected throughout the day, rising to approximately $1,800 per ounce. Last week, the $1,783 level provided support for the price of gold and that support still held on Monday. A resistance point can be found at the $1,831 level and another at the $1,800 level.
Today, traders should pay special attention to the speeches of the two FOMC members in the evening. Fed members’ speeches are scanned by investors for insights into the bank’s future monetary policy. A more hawkish stance is expected to push the price of gold further down. More importantly, Fed Chair Jerome Powel is scheduled to testify on Tuesday before the Senate Banking Committee on the subject of his renomination as the head of Fed. His speech is likely to cause market volatility and affect the price of gold.
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