Gold Price Analysis: Fed Signals More Rate Hikes, Gold Dips Below $1,970

Asian market gold price has lost the key support level of $1,970.00, as policymakers at the Federal Reserve (Fed) believe that additional rate hikes are necessary to tackle stubbornly high inflation in the United States. Consequently, precious metals have been steadily declining.

Meanwhile, S&P 500 futures in the Asian market continue to rise, indicating a strong rebound in market risk appetite. Investors seem optimistic about an early increase in the US debt ceiling under President Biden. However, Monday's meeting between Biden and McCarthy ended without an agreement, though a constructive tone was maintained.

President Biden referred to the terms proposed by Republicans as “extreme,” as Democrats are ready to reduce some expenditures but oppose imposing higher taxes on the wealthy. At the same time, US Treasury Secretary Janet Yellen continues to warn relevant departments that the US economy is rapidly approaching default as June 1st is the deadline for resolving debt payments.

Additionally, St. Louis Fed President Brad said on Monday that the Federal Reserve aims to address inflation while the labor market remains strong. Brad further added that policy rates may need to be raised this year, possibly by 50 basis points.

Gold Technical Analysis

It is anticipated that gold prices will maintain a clear downward trend after breaking below the demand zone in the range of $1,950-$1,970. The 20-period exponential moving average (EMA) at $1,975.54 forms a resistance level for the bulls.

The Relative Strength Index (14) has slipped into the bearish range of 20.00-40.00, indicating that gold prices will continue to decline.

Gold Price

Overview

Latest Price: 1965.88

Intraday Change: -6.02

Intraday Change %: -0.31

Opening Price: 1971.9

Trend

20-day Moving Average: 2003.78

50-day Moving Average: 1989.73

100-day Moving Average: 1930.4

200-day Moving Average: 1826.71

Levels

Previous Day's High: 1982.63

Previous Day's Low: 1968.95

Last Week's High: 2022.18

Last Week's Low: 1952.01

Last Month's High: 2048.75

Last Month's Low: 1949.83

Daily Chart Fibonacci Retracement Levels

38.2% Fibonacci Retracement: 1974.18

61.8% Fibonacci Retracement: 1977.4

Daily Chart Pivot Support Levels

Pivot Support 1: 1966.36

Pivot Support 2: 1960.81

Pivot Support 3: 1952.68

Daily Chart Pivot Resistance Levels

Pivot Resistance 1: 1980.04

Pivot Resistance 2: 1988.17

Pivot Resistance 3: 1993.72

*The provided information is for reference purposes only and should not be considered as financial advice or investment recommendation.