Gold price steadied on Monday, after reaching monthly lows on Friday. Early last week, gold reached a two-month high of $1,853 per ounce, but plummeted on Wednesday after the Federal reserve’s statements. Fed Chair Powell’s speech was more hawkish than anticipated, indicating that the Fed would adopt an aggressive monetary policy in order to combat rising inflation rates. The dollar rose after the Fed’s announcements and yields also climbed across the US treasury curve. Rising real yields push the price of gold down and it becomes less appealing as an asset, since it does not pay dividends or interest.
On Monday however, gold prices rose a little and traded sideways around the $1,790 per ounce level. Rising geopolitical tensions boost the price of gold, as investors turn to safe-haven assets. The crisis between Russia and Ukraine has been supporting the price of gold and an escalation of the crisis might boost its price.
If the price of gold rises again, it may find resistance at $1,829 per ounce and further up at $1,877 per ounce, while if the price of gold decreases further, support may be found at 1,782 per ounce. This week, the gold price is expected to show some volatility, due to mounting tensions between Russia and Ukraine.
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