The price of Gold fell sharply on Thursday for the fourth consecutive day and hit its lowest level since early March. Economists at TD Securities report that near-term risks are very to the downside.
FOMC forecasts could be met
The price of Gold fell below the key technical support level of $1,870, leaving the door open for further declines.
The recent compelling drop below $1,900, after having traded sideways for most of the year thanks to repeated short buying, has been largely driven by the Federal Reserve’s statements that it will maintain a restrictive policy for a long period.
The continued strength of US economic data and the rebound in crude oil prices have made the Fed’s hawkish discourse very credible, which could see the FOMC’s forecasts come true.
The Fed’s talk of higher rates for longer, fears that rising energy costs will filter into core inflation, and the resilience of the US economy have us fearing even more declines.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
