One of the market’s focal points this week was Federal Reserve Chairman Warsh’s first appearance before the House and Senate at their semi-annual monetary policy report hearings, and how he responded to questions from lawmakers. Investors are closely watching the Fed’s interest rate direction in the second half of the year. While market participants may currently lack more targeted forward guidance from the Fed under Warsh’s leadership, the focus remains on whether there will be a proactive tightening of monetary policy in the second half of the year.

On the other hand, the renewed threat of closure of the Strait of Hormuz has kept US crude oil prices high, even pushing them higher. This likely hasn’t lessened concerns that the Fed needs a tighter monetary policy to curb inflation. The Fed’s interest rate hike could put significant downward pressure on gold prices in the short term.

A short position can be established around $4,049, with a short-term target of $3,952 for profit-taking and a stop-loss at $4,069.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com