(Kitco News) - Gold has fallen 0.81% so far on Monday after Fed Powell's speech on Friday was more hawkish than the market expected. At the Jackson Hole central banking conference in Wyoming, Powell said the Fed will raise rates as high as needed to restrict growth and would keep them there "for some time" to bring down inflation that is running at more than three times the Fed's 2% goal.
In addition to this, Euro Zone money markets are now pricing in a 67% chance of a 75 bps ECB rate hike in September, up from 48% on Friday. This comes after comments from ECB members who are now looking at a 50-75 bps rise next month. ECB's Kazaks said "Frontloading rate hikes is a reasonable policy choice," Latvia's central bank chief noted "We should be open to discussing both 50 and 75 basis points as possible moves. From the current perspective, it should at least be 50,"
The daily chart below shows the price moving toward the previous wave low. The price hit $1681.00/oz back in late July and now the yellow metal is moving toward the level once again. The fact that yields are rising is offering another safe haven to market participants and the U.S. 2-year yield has now reached its highest level since November 2007. If there is to be some support at the red shaded area look out for the trendline break to the upside but for now, downside levels are in focus.
