The rebound of international gold prices is limited, and the Fed's hawkish posture is expected to be fully upgraded

On Tuesday (June 14), the international gold price rebounded and turned higher after refreshing the low since May 18 to $1,809.16 per ounce, and the pause in the dollar's upward movement eased the selling pressure in the gold market. But gold's gains were capped by mounting bets on aggressive monetary tightening by the Federal Reserve. It is almost certain that the Fed's hawkish stance will only be more hawkish than it was in March.

At 15:01 GMT+8, spot gold rose 0.56% to US$1,829.69 per ounce; the main COMEX gold futures contract fell 0.02% to US$1,831.6 per ounce; the US dollar index fell 0.23% to 104.972.


The U.S. dollar index hit its highest level since mid-December 2002 at 105.29 overnight, sending dollar-denominated gold down nearly 3 percent, although gold is expected to retain its role as an inflation hedge.

U.S. dollar sentiment was supported by bets that the Federal Reserve could raise interest rates by 75 basis points this week. Growing fears that rising interest rates will trigger a recession in the U.S. also sent global stock markets tumbling. And before the Fed's interest rate decision on Wednesday (June 15), non-yielding asset gold is unlikely to attract a lot of buying.

Federal Reserve officials on Wednesday will lay out how to cool the economy without throwing it into disarray in the coming months. But achieving that goal is increasingly difficult, with the U.S. economy struggling with persistently high inflation and weak growth prospects.

It is almost certain that the Fed's hawkish stance will only be more hawkish than it was in March. The meeting came two weeks after Fed Chair Jerome Powell and U.S. President Joe Biden met at the White House amid growing concerns that soaring costs for everything from rent and food to gas and airfare have diluted job prospects (the unemployment rate). Currently 3.6%) attractive positive effect.

"It's going to be a tricky meeting in terms of messaging, the outlook is bleak, and they don't have any choices that are easy to make," said Julia Coronado, a former Fed economist and president of Macro Policy Perspectives.

Strategists at TD Securities said a technical breakdown could be the catalyst for a sharp drop in gold prices, with a widening valuation gap between gold and real interest rates fueling a revaluation of gold prices. "Trend remains skewed to the downside... We estimate a break below $1,810 will trigger a massive sell-off from systemic trend followers."