Gold Steady above the Key Support at $1,815 – A Quick Trade Plan
Arslan Butt • 3 min read
Gold closed at $1,819.05, after setting a high of $1,822.90, and a low of $1,812.25. Despite the rising strength of the US dollar and steady US Treasury yields, gold found some support on Monday and reversed its bearish trend of the previous three days. The hawkish signals from the US Federal Reserve strengthened the US dollar, which further capped any gains in the precious metal. Markets were also pricing in the sooner-than-projected balance sheet reduction by the Fed.
A stronger US dollar keeps gold under pressure
The benchmark US Treasury yields hit 1.81% last week, and they have remained close to that number, which is the highest level in two years. The US Dollar Index is also green, and it is hovering around the 95.26 level. Last week, Fed Chair Jerome Powell said that the US economy was ready to start a tighter monetary policy, and these comments have been supporting the dollar since then. Other Fed officials also indicated that the Federal Reserve was likely to hike interest rates in March 2022. The US Federal Reserve will meet on January 25 and 26 to hold its next policy meeting.