Gold Pressure Set to Remain Under Pressure Because of Hawkish Fed

31069 gold pressure set to remain under pressure because of hawkish fed

Gold prices fell to a three-week low on Friday and could see their worst weekly performance since late November as the dollar rallied after the Fed signaled a rate hike in March.The Federal Reserve on Wednesday signaled it was likely to raise US interest rates in March and reaffirmed plans to stop buying bonds later that month before launching a major balance sheet cut.An increase in the interest rate will increase opportunity cost of holding zero-yield gold. The market appears to be targeting the $1,800 level, which is acting like a giant price magnet. And we seem to be continuing to revolve around it. Dollar strength and rising yields put pressure on the precious metal.The World Gold Council (WGC) expects demand for jewelry, small bars and coins to remain strong in 2022, with central banks “continuing to buy gold, but at a slower pace than in 2021.”

Source: Tickmill

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