Gold Extends Losses and Hits Three-Month Lows
Alex Boltyan | Jun 21, 2023 12:24PM ET
Gold price extended its decline on Wednesday, charting the fourth red daily candle in a row, as the yellow metal struggles to find demand following the Federal Reserve's hawkish skip last week.
At the time of writing, the spot price, XAU/USD, is trading at the $1,930/oz area, 0.30% below its opening price.
Investors continue to assess last week's Fed decision as chair Jerome Powell testifies before the US Congress at the semi-annual monetary policy report. The Federal Open Market Committee (FOMC) voted unanimously to skip a rate hike, although the dot plot showed policymakers are leaning toward two more rate increases this year.
At the congressional hearing, Powell reiterated that the Fed is very far from its inflation target of 2% while highlighting it may make sense to move rates higher at a more moderate pace.
Hawkish expectations have weighed on gold prices even though US yields have been moving back and forth over the last sessions.
From a technical perspective, the XAU/USD pair's short-term bias is skewed to the downside, as shown by indicators on the daily chart. The price has fallen below the 20- and 100-day simple moving averages (SMAs) and struck a three-month low of $1,919, supporting the negative outlook.
On the downside, the following supports could be found in the $1,900-$1,885 area ahead of the 200-day SMA at around $1,850. On the flip side, recovery of the $1,940-50 zone could lead to a retest of the $1,970 resistance zone ahead of the $2,000 psychological level.
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