Powell raised the possibility of at least one more rate hike this year
The price of gold has been trending lower for the third session in a row on Thursday, struggling amid dollar’s strength. During the previous session, the yellow metal briefly climbed to three-week highs around $1,947 before retreating back into negative territory.
After a slide from local highs, the precious metal dipped back below the 55-DMA that turned back into resistance. Now, the bullion holds around the lower end of a local trading range, lacking the momentum to regain the $1,930 zone that represents the nearest barrier for buyers. Should the intensify reemerge any time soon, the bullion could threaten the $1,920 zone.
On the weekly timeframes, the bullion still looks vulnerable as the metal remains under the 20-SMA that continues to cap gains. On the upside, the immediate target is now represented by the $1,937 region, followed by the $1,943 region where the 100-DMA arrives.
The bullion could stay on the defensive in the near term as the dollar keep digesting Fed’s hawkish pause. The US central bank left the key rate unchanged but warned that interest rates will remain higher for longer. Powell also raised the possibility of at least one more rate hike this year. As such, investors are now sharply lowering their expectations for the Fed’s dovish shift, thus pressuring the yellow metal.
So, the path of least resistance for the bullion remains to the downside, both in the short amd medium term. However, dip buyers could reemerge in the $1,920-$1,915 region that may prevent the prices from challenging the $1,900 psychological level that capped the selling pressure last week. On the upside, the nearest resistance now arrives around $1,931, followed by the $1,937 intermediate barrier on the way to the $1,950 key hurdle.
