The gold price remained under pressure today continuing its downward spiral as investors await Wednesday’s interest rate decision and monetary statement from the US Federal Reserve.
The precious metal has now lost around $200 ever since pushing through the $1,300 and then sharply pulling after Donald Trump was elected the next president of the United States.
The key for gold in Wednesday’s rate decision is how much of a rate rise is already priced into the market with a now near 100% chance that rates will move higher.
Broad US dollar strength as well as support for other precious metals is also pressuring the gold price with investors mainly choosing the safety of the greenback at this time
“Strength in other markets and the dollar continue to weigh on the precious metals. Gold prices have set a fresh pullback low at $1,154.55, the rest are holding up better, with palladium prices consolidating in high ground,” Metal Bulletin analyst William Adams said.
“With the FOMC decision on Wednesday, we wait to see how much of the rate rise, assuming there is one, is already discounted in the gold price,” he added.
Even if a rate hike is factored in at the moment the following monetary statement will be closely monitored by investors as there is now speculation with the recent run of strong economic data that there are further rises in store which is bound to send the gold price lower.
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