Gold is struggling to stay above $2,000 as more Fed rate hikes

The gold price appears vulnerable above $2,000.00 as the Fed raises interest rates further.

In the Asian session, the gold price appears vulnerable above the psychological resistance of $2,000.00. After reaching a four-day low of $1,992.50. The precious metal has begun to recover. However, the recovery appears fragile. As the upside is limited by bullish bets on the US Dollar Index (DXY).

During the quarterly earnings season, US equities are expected to remain stock-specific.

The USD Index is attempting to extend its recovery above the immediate resistance level of 101.75. As the likelihood of another 25-basis point (bp) rate hike from the Federal Reserve (Fed) is extremely strong. According to the CME Fed watch tool, the chances of a rate hike are nearly 80%.

Meanwhile, after a minor sell-off on Friday. S&P500 futures have added significant gains on early Monday. Equities in the United States are expected to rise. to remain stock-specific amid quarterly results season. Because petrol prices were extremely low in March. Manufacturing and oil-dependent companies could see some decent earnings recovery.

Demand for US government bonds has fallen significantly. Owing to rising expectations that the Fed will tighten policy further. According to Atlanta Fed President Raphael Bostic. One more quarter-point rate hike will allow the Fed to end its tightening cycle with some confidence that inflation will gradually return to its 2% target.

Gold Technical Analysis

The gold price fell sharply after failing to test the critical resistance level of $2,050.00 on Thursday. The yellow metal reversed sharply and fell below the upward-sloping trendline drawn from the April 03 low of $1,950.52. Gold is expected to fall further towards the advancing trendline drawn from the March 22 low of $1,934.34.

The price of gold has fallen below the 50-period Exponential Moving Average (EMA) of $2,016.83. Indicating that the short-term trend has shifted bearish.

Meanwhile, the Relative Strength Index (RSI) (14) has fallen into the bearish range of 20.00-40.00. Indicating that further weakness is on the way.

Gold Daily Trends