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17 Dec 2014
Gold declines as US dollar strengthens
FXStreet (Mumbai) - The yellow metal weakened tracking a sharp rise in the US dollar index post the Federal Reserve (Fed) policy statement.
Gold now trades 0.53% lower at USD 1188/Oz levels as the US dollar index rose 1.44% to trade at 89.33 levels. Gold came under pressure after the Fed chair. Yellen stated that almost all participants see a rate increase in 2015 and that even though there is no pre-set time of lift-off from record low interest rates, still faster progress would lead to possible normalization sooner.
The hawkish statement overshadowed the downward revision of the 2015-end median interest rate estimate. Moreover, the 2-yr yield, which mimics short-term interest rate expectations, has recovered to trade 3.7 basis points higher at 0.597%. Gold, known to have an inverse relationship with the interest rates, declined well below the 50-DMA located at USD 1197.94.
Gold Technical Levels
Gold has an immediate support located at 1186.40 (Dec. 5 low), under which losses could be extended to 1774.70 levels (Nov. 19 low). On the other hand, resistance is seen at 1997.94 (50-DMA) and 1200.00 levels.
Gold now trades 0.53% lower at USD 1188/Oz levels as the US dollar index rose 1.44% to trade at 89.33 levels. Gold came under pressure after the Fed chair. Yellen stated that almost all participants see a rate increase in 2015 and that even though there is no pre-set time of lift-off from record low interest rates, still faster progress would lead to possible normalization sooner.
The hawkish statement overshadowed the downward revision of the 2015-end median interest rate estimate. Moreover, the 2-yr yield, which mimics short-term interest rate expectations, has recovered to trade 3.7 basis points higher at 0.597%. Gold, known to have an inverse relationship with the interest rates, declined well below the 50-DMA located at USD 1197.94.
Gold Technical Levels
Gold has an immediate support located at 1186.40 (Dec. 5 low), under which losses could be extended to 1774.70 levels (Nov. 19 low). On the other hand, resistance is seen at 1997.94 (50-DMA) and 1200.00 levels.