Why is gold poised to remain under pressure?

The US inflation target has not been realized yet. Price pressures look too sticky and the country’s economy is showing little weakness. Therefore, the US dollar remains strong, and accordingly, gold could remain under downside pressure. Economists also see chances for further rate hikes by the US central bank more than the market has priced.

The precious metal is trading at $1946.65 per ounce at the time of writing, up by 0.03%. The concern that prices will not drop as fast as the US Fed wishes, has prompted a sharp correction in recent days, with the risk that gold price may drop to support near low $1,900s, should the 100-DMA support be breached.

The short run represents downside risk, if the US economy stays firm. Inflation is not moving down slower, it rose. This may well prompt the Fed to hike more than the market has priced and may be bad news for longs and gold prices.