The recent decline in the value of the US dollar is being reversed as seen by the dollar index's (DXY) move higher for the second straight day. Higher US Treasury rates, with the 2-year UST, offered at 4.484% and the 10-year at 4.065%, are supporting the dollar. Neel Kashkari, a member of the Fed board, said yesterday that unless success was made in the battle against inflation, interest rate hikes may not "end at 4.5%, or 4.75%, or something like that." His remarks are helping to boost US Treasury rates. Increased US interest rates and Treasury yields continue to be major obstacles for gold.
The price action is being driven by an uninterrupted sequence of lower highs and lower lows, as shown on the daily Gold chart. The precious metal is now trading below all three simple moving averages, and the chart also features a bearish "death cross" that formed at the beginning of June.
With support at $1,615 per ounce as the initial landing point, it appears that gold will move down in an unopposed direction. Below this point, a modest swing low at $1,567/oz, reached in April 2020, is protected by round number support at $1,600/oz. Any bullish momentum will be slowed by a collection of recent highs that go all the way back to $1,688/oz.