This is a result of which the price of an ounce of gold moved to the level of 1845 dollars, the lowest for the price of the yellow metal a month ago, before it settled around the level of 1865 dollars an ounce at the time of writing the analysis.
The performance may remain in narrow ranges until the US Central Bank announces its monetary policy decisions tomorrow, Wednesday. Prior to the announcement, the US dollar was reaping more gains, which was negative for the gold price.
Analysts are counting on the possibility of any change in the Fed's monetary policy stance. Amid rising US inflation, some analysts seem to be hoping the Fed will start discussing reducing its asset purchases.
In the same performance of gold, silver futures contracts ended their trading lower to 28,039 dollars an ounce, while copper futures contracts settled at 4.5270 dollars an ounce.
The Monetary Policy Committee of the US Federal Reserve is scheduled to announce its policy decisions on Wednesday. Any deviation from the rhetoric of a temporary pickup in inflation is likely to hurt gold's near-term outlook. Forecasts indicate that the Fed faces a dilemma: On the one hand, US inflation is rising much faster than expected earlier this year, although the bank described the price pressures as “temporary” as a result of supply shortages and a rapid recovery. On the other hand, employment has been slower than the benchmark mentioned by Bank Governor Jerome Powell at a press conference after the last meeting of the Federal Reserve in late April.
Powell said at the time that he would like to see a "series" of employment reports create about a million additional jobs each month. The labor market has yet to reach that total in any month this year, although employers have recorded a record number of open jobs.
Last week, the government reported that US inflation jumped to 5% in May from a year earlier - the largest year-over-year rise since 2008. The increase was driven in part by a massive rise in used-car prices, which have risen with the shortage of semiconductors. Vehicle production has slowed. Car rental companies have had to buy used cars to rebuild their fleets, many of which have been sold out in the shadow of the pandemic.
Technical analysis of gold: Undoubtedly, the recent selling operations succeeded in breaking the upward trend in the price of gold, as it is clear on the chart of the daily time frame, and with this break, gold investors may be exploited to think of buying to gain a rebound. Currently, the closest support levels for gold are 1855, 1840 and 1825, respectively. On the other hand, the bulls will regain control of the performance again if the gold price moves towards the resistance levels of 1885 and 1900 dollars, respectively. I still prefer buying gold from every bearish level. I expect limited movements in the price of gold in narrow ranges until the most important event for this week is the US Federal Reserve announcement tomorrow.
The US economy will announce today the reading of the retail sales, the producer price index and the industrial production rate in the country.
