In the past week, gold has fallen by almost three percentage points. The decline started after the Fed meeting a week ago in which the officials sounded more hawkish than expected. The statement said that the Fed was looking forward to two more rate increases this year. The hawkish Fed and a more dovish ECB and BOJ made the dollar rise more than 1%. As the dollar strengthens, gold tends to weaken as shown in the chart below.
In the past week, gold has fallen from above $1305 to a weekly low of $1260. The precious metal has reached $1268. The price is below the 14 and 21-day moving average. It’s RSI is currently at 34. This means that gold could see some slight gains in the short term. This could see it test the important resistance area of $1280. However, the long-term trend for the metal is likely downwards as the dollar continue to strengthen.