Gold fell below $1750 per ounce on the Fed’s hawkish comments

On Monday, there was a fall of gold prices below the key support level. Such a drop in price was driven by a hawkish sentiment of the Federal Reserve’s (Fed’s) representatives, which caused investors’ confusion on the course of the country’s monetary policy.

On the same day, St. Louis Federal Reserve President James Bullard stated that in order to fight inflation, the Fed might continue to raise interest rates. At the same time, he stressed that rates have to be increased at least by another 1% and reach 5–5.25%. According to him, the central bank has enough resources to keep these rates until 2024.

John Williams, New York Fed President, added that in 2024 interest rates are likely to be lowered, as inflationary pressures gradually weaken.

Hawkish comments of the central bank’s representatives refuted market expectations of slowing down the pace of hikes in the near future. Also, this Fed’s sentiment contributed to strengthening of the dollar and weakening of such assets as gold. The precious metal fell sharply, as interest rates in the U.S. began to increase.