2022.05.1812:57:00UTC+00Gold Drops Post Aggressive Fed Hints

Gold prices dropped further on Wednesday amidst an aggressive tone by the Fed on inflation control. The Fed Chair Jerome Powell had on Tuesday hinted that the Fed would keep tightening till inflation has been tamed.

U.K.'s inflation rising to a 40-year high and the likely aggressive response by the Bank of England also weighed on market sentiment.

Bond Yields increased across tenors and geographies in response to the developments around inflation and its management, and impacted prices of the non-interest-bearing yellow metal.

The Dollar Index (DXY) however traded between 103.19 and 103.77, much below the 20-year high of 105 touched on May, 13. DXY is currently near 103.53, a 0.16 percent surge over the previous close of 103.34. The drop in the price of the yellow metal is despite the weakness in the Dollar.

Gold Futures for June settlement dropped 8 points to trade at $1,810.75, down 0.45 percent on an overnight basis. Prices oscillated between $1,805.25 and $1,819.19 versus the previous close of $1818.90.