Hawkish Fed concerns over gold

Gold performed negatively in a week where the Fed signaled that it would continue its aggressive monetary tightening path for longer than expected. Gold is set to close the week lower after the Fed said it would not abandon its aggressive monetary tightening policy anytime soon. Gold tested the $1,775 level on the last trading day of the week. Spot gold, which had a volatile week, had passed $1,800 an ounce on Tuesday after data showed that US inflation was slowing. However, the hawkish comments made by the Fed on Wednesday helped gold fall below this threshold. "Gold is weakening as markets worry that global central bank tightening will increase recession fears and support the dollar. Gold will eventually return to its safe haven status, but before that happens, we need to see more market players convinced that the Fed will not follow through on its hawkish threats," Oanda Senior Market Analyst Ed Moya said in a note.