Gold prices continue to be bearish today, pressured by a more stable USD as investors braced for further aggressive interest rate hikes by the U.S. Federal Reserve and other major central banks this week, as they try to stop inflation from running higher. The USD index has gained around 0.5% so far today, as most other major currencies contiue to slide lower.

Gold 15 Minute Chart – The 200 SMA Keeping the Pressure Down

Selling Gold at the 200 SMA after the retrace higher

As a result, Gold prices continued to slide and they extended the losses, following the decline below the major support zone at around $1,680 last week. The yellow metal had fallen sharply in the previous week, weighed by gains in the USD index and firm US bond yields. Last week’s hot US inflation data, combined with a strong labor market and retail sales numbers, prompted some analysts to predict a full percentage point hike by the Fed later this week.

Today Gold made a strong move in the early hours of the morning after markets opened, but the jump stopped around the 200 SMA (purple) on the 15 minute chart and the decline resumed. A while ago we saw another retrace higher, but the 200 SMA continued to hold as resistance ad we decided to open a sell Gold signal, which closed in profit as this moving average rejected the price again.

All eyes are on the FED’s monetary policy decision later week. Though most analysts expect a 75 bps hike, some see the US central bank hiking by 100 basis points. High interest rates increase the opportunity cost of holding non-yielding bullion.