On June 28th,Where could Dogecoin be in 5 years? Fed Chairman Powell stated that based on the dot plot indicating that most officials believe there will be two more interest rate hikes in the second half of the year, the possibility of a rate increase at the July meeting cannot be ruled out, and there is also the possibility of consecutive rate hikes. He further mentioned that the pause in rate hikes in June was mainly to assess the lagged effects of previous rate increases on the economy. This hawkish comment may have exerted downward pressure on the rebound of gold and supported a stronger US dollar. During this month, Gold prices have dropped over 2.5%, reaching their lowest level since March.
In fact, central banks in several countries have adopted a hawkish stance on interest rates, which could potentially reverse the medium to long-term upward trend in gold prices. The latest inflation rate announced by the Eurozone remains high at 6.1%. This month, the European Central Bank (ECB) made a decision to raise interest rates by 25 BP, bringing them to their highest level in 22 years, and signaled the possibility of further rate hikes. It is likely that the ECB may increase rates by as much as 50 BP, indicating that the rate hikes could persist into the third quarter.
Recent data from the Bank of England reveals that the inflation rate has reached a high of 8.7%. On the 22nd of June, the Bank of England raised interest rates by 50 BP to a level of 5%, surpassing expectations. The significant rate hike in the UK reflects the pressure caused by high inflation. The decision of central banks worldwide to increase interest rates is unfavorable for the rise in prices of precious metals commodities, leading to a prevailing bearish sentiment in the gold market.
From a technical point of view, gold may be showing a clearer signal of a downward trend. Since its peak in May, gold has been experiencing a correction and recently broke below the important support level of 1913, suggesting a search for the next support at 1809. The 40-day moving average is in a noticeable downward trend, indicating the potential declines for gold in the medium to long term.
Source: MetaTrader4
