The price of gold is facing a downward trend as it tests support around $1,950 per ounce. This follows Federal Reserve Chair Jerome Powell’s statement regarding the possibility of the Federal Reserve maintaining elevated interest rates for a longer period in order to bring inflation back down to its target level of 2%. This news has led to a pullback in gold prices, as investors adjust their expectations for future monetary policy.
The Federal Reserve’s commitment to upholding higher interest rates in the face of inflationary pressures has introduced uncertainty into the market. The prospect of prolonged higher interest rates diminishes the appeal of non-yielding assets like gold, leading to a decrease in demand and ultimately putting downward pressure on prices. As a result, the gold market is currently experiencing some selling pressure, with prices hovering around the $1,950 level.
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