US session gold back below the $1,800 mark after the Fed meeting

Gold futures gave up $1,800 after two weeks of holding it, after a second day of price pressure in the market with the Federal Reserve Chairman saying the central bank could raise interest rates. without worrying about the strength of the US job market, as long as inflation can be controlled.

The most active gold futures contract on New York's Comex, gold futures for February delivery, was down $36.60, or 2%, at $1,793.10 an ounce. This is the first time since January 11 that the benchmark gold futures contract has fallen below the psychological support of $1,800.

Prior to that, it hit a two-month high of $1,854 on Monday, as US inflation widened to a four-decade high.

“Gold has been stuck for months between hard ground and rock made up of $1,785 support and $1,835 resistance,” said Phillip Streible, precious metals strategist at Blueline Futures in Chicago. “As it broke above $1,850 this week, the gold buyers were excited that they had finally broken down to the new path. Well, the Fed just proved that's not the case. ”

Still, Streible said he bought bearish gold on Thursday "with the belief that we'll get back to $1,800."

Gold has always been seen as a hedge against inflation while news of rate hikes is usually negative for the yellow metal.

Powell, chairing the January meeting of the Fed's Federal Open Market Committee on policymaking on Wednesday, spoke of the possibility of the Fed raising interest rates faster after the first hike in the pandemic era, has maybe in March.

The Fed cut interest rates to near zero after the Covid-19 outbreak in March 2020, keeping them between 0 and 0.25% over the past 20 months. Powell and other officials at the central bank say a series of rate hikes will be needed now to rein in rising prices.

Before starting to rise in January, gold struggled as the dollar and 10-year US bond yields spiked on expectations of rate hikes. That seems to have changed when the yellow metal broke through the $1,835 resistance a little over a week ago and stayed there.