Gold prices fell more than 1% on Tuesday to US$2,027.26 per ounce, down US$30 throughout the day. Goldās decline was mainly attributed to Federal Reserve Governor Wallerās hawkish remarks on cutting interest rates this year, leading to a strengthening dollar and a rise in U.S. Treasury yields.
Governor John Waller stated that the United States is āvery closeā to the Fedās 2% inflation target, but cautioned against rushing to cut interest rates until it becomes clear that lower inflation will continue. His speech coincided with market expectations for the Fedās March meeting, going against the anticipated interest rate cuts.
Following Wallerās speech, traders reduced bets that the Fed would cut policy rates in March, causing the U.S. 10-year Treasury bond yield to surge above 4% on Tuesday. Investors are also weighing the possibility that the Federal Reserve will soon cut interest rates significantly.
Most analysts remain cautious despite the marketās aggressive stance, as multiple Fed officials are speaking this week and any signs of delaying or scaling back interest rate cuts could impact gold.
From a technical perspective, gold is facing downward pressure to adjust in the short term, with the top short-term focus on the first-line resistance of 2045-2048, and the bottom short-term focus on the first-line support of 2025-2020.
Wang Gang, from the Bank of China Guangdong Branch, shared his personal views on the matter, cautioning that the current economic indicators and the central bankās stance may overturn the marketās expectations of a sharp interest rate cut, leading to a short-term downward pressure on gold prices.