Gold sits at over 1-week lows amid firming Fed rate hike expectations
| • Hawkish FOMC minutes prompt fresh selling on Wednesday.
• Strong USD continues to add to the bearish pressure.
• Risk-off mood lending some immediate support.
Gold remained under some selling pressure for the fifth consecutive session on Thursday and is currently placed at over 1-week lows, around the $1320-21 region.
The precious metal did spike higher, to an intraday high level of $1336, following the release of FOMC meeting minutes, but met with some fresh supply as the details pointed to the need for further interest rate hikes.
The policymakers showed confidence on inflation, economic outlook and justified gradual Fed monetary policy tightening cycle, which eventually prompted some aggressive selling around the non-yielding commodity.
Meanwhile, the US Dollar stood tall in wake of the perceived hawkish assessment of the latest minutes and further collaborated towards driving flows away from dollar-denominated commodities - like gold.
Further downside, however, seemed cushioned by a fresh wave of global risk-off trade, which tends to underpin the precious metal's safe-haven demand. Hence, it would be prudent to wait for follow-through selling before positioning for any further near-term weakness.
Technical levels to watch
Immediate support is now pegged near the $1315-14 region, below which the commodity seems to head towards $1310 intermediate support en-route $1307 level. On the upside, $1326-28 zone now seems to act as an immediate hurdle, above which the metal could jump back towards $1340 supply zone.
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