The price of gold may fall by more than 100 dollars? The Fed decides that the current bulls are starting to run away. Provider FX678

On Monday (June 14), the price of gold continued the last Friday’s decline, falling by more than 1% to a low of more than a week, dragged down by the strength of the US dollar. At the same time investors await the results of the Fed’s policy meeting scheduled to be held this week, and the recent surge in the consumer price index is regarded as a temporary phenomenon. The U.S. dollar index remains strong, close to a one-week high, which makes gold more expensive for investors holding other currencies.

Economic data boosted the U.S. dollar’s upward trend, and the price of gold may fall in a single week, a record low since March

The optimistic US data has boosted interest in the dollar. The University of Michigan’s consumer confidence index was higher than market expectations, and the number of initial jobless claims fell to a record low before the flu.

Gold played a vital role as an inflation hedge asset, as investors began to factor in the substantial recovery of the US economy and the rise in inflation. but,The price of gold has fallen by more than 1% this week. If the decline continues, it will be the biggest weekly decline since March this year.

In addition, the market ignored the high inflation data in the United States on Thursday, but digested the Fed’s statement that inflation may only be a temporary phenomenon due to the imbalance between supply and demand. Investors are now turning their attention to the Fed’s monetary policy decision later this week.It is expected that the Fed will continue to maintain its ultra-loose policy until the economy further recovers.

The Fed insists that inflation will not continue, the interest rate decision this week has become the focus, and the price of gold may continue to fall

Stephen Innes, managing partner of SPI Asset Management, said: “The market began to anticipate that the Fed may moderately turn to discuss reducing the scale of bond purchases, which will prompt investors to take profit or reduce gold and foreign exchange positions.“Innis said that the result was that the U.S. dollar also strengthened slightly, adding that inflationary pressures may not continue.

Data released last week showed that the US Consumer Price Index (CPI) rose sharply in May. But Fed officials have repeatedly stated that inflation will be temporary. The focus now shifts to the Fed’s June 15-16 meeting to further clarify policymakers’ views on rising inflation and future monetary policy.

Jeffrey Halley, senior market analyst at OANDA, said in a report, “Price movements indicate that the speculative market once did a lot of gold, but the gold market has sold off since last Friday, and the decline continued until Monday.The price of gold has strong support at US$1,856 per ounce, but it must hold the range of US$1840 to US$1845 to rebound and rise.”

As of the week of June 8, speculators reduced their net long positions in gold on the New York Mercantile Exchange (COMEX) and increased their net long positions in silver.Trading Economics trade economy global macro models and analysts are pessimistic about the gold price trend. They predict that by the end of the quarter, the gold transaction price is expected to reach US$1,825.61 per ton ounce. Looking ahead, analysts expect the gold price to reach 1,723.44 in 12 months.

(Spot gold daily chart)

At 16:15 on June 14th, Beijing time, spot gold was quoted at US$1,857.61 per ounce.