As aggressive Fed speakers foster fresh caution, gold continues to decline.
As several Federal Reserve officials cautioned that interest rates could yet climb further amid relatively strong inflation and a robust labor market, gold prices dipped marginally in early Asian trade on Tuesday.
The previous session saw some increases for the yellow metal, but they were modest as investors prepared for a week of important U.S. economic indicators, starting with retail sales and industrial output due later in the day.
Later this week, additional Fed representatives will also speak, most notably Chair Jerome Powell on Friday.
However, the price of gold remained stable at around $2,000, with safe-haven demand for the yellow metal continuing to be supported by worries of a U.S. economic downturn this year. The primary force behind a gold surge through May, which briefly saw spot prices reach record highs, was haven demand.
Gold futures dropped 0.2% to $2,019.35 per ounce by 20:25 ET (00:00 GMT), while spot gold decreased 0.1% to $2,014.82 per ounce.
Given that it raises the opportunity cost of owning bullion, the potential of increasing U.S. interest rates is bad news for non-yielding assets like gold. On the other hand, demand for the yellow metal as a haven is anticipated to be supported by worries about a U.S. recession and a probable banks collapse.
GOLD TECHNICAL ANALYSIS DAILY CHART:
Gold is currently trading in the down channel.
Gold is currently trading above 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting no trend.
Gold resistance is at 2018.68 & its immediate support level is 2010.09
HOW TO TRADE GOLD
The price of gold has tested the previous day’s low and is currently trading around a key support level; if this level is broken, the price of gold is likely to continue falling.