XAU/USD has been extending its falls and trades under the round $1,800 mark for the time since early May. This round level served as resistance during April and was broken only in early May. The current fall has sent the precious metal to a 10-week low.
It is essential to note that buyers have come in, and XAU/USD's low is only $1,799.33 at the time of writing.
The main downside driver for gold is the Federal Reserve's hawkish decision on Wednesday. The world's most powerful central bank surprised markets by signaling two rate hikes in 2023 and by indicating that it will soon work on tapering down its bond-buying scheme. The $120 billion/month program has been supporting XAU/USD and its potential reduction is weighing on the metal.
Moreover, returns on 10-year Treasuries have jumped to 1.56%, making yieldless gold less attractive to investors. XAU/USD first dropped in response to the Fed decision and then suffered another downfall on Thursday.
See more about the Fed decision:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.