Federal Reserve comments send gold prices downwards

Last year proved to be a dream for gold speculators and investors after the Gold Price soared to historic highs thanks to a perfect storm out of a global pandemic, massive government stimulus programs, a weakening dollar, and a bull market that eventually ran out of steam. The rapid rally was the sharpest surge the metal has seen in more than a decade. Unfortunately, the rally has run out of air and the price of gold has fallen sharply from its all-time high of $ 2,075 an ounce. Gold futures fell below $ 1,800 an ounce again, posting their largest daily loss in seven months on Thursday after the US Federal Reserve accelerated its expected pace of monetary tightening. On Wednesday, Fed chairman Jerome Powell said during his post-decision press conference that rising inflation was mostly due to "transitory" factors, but also acknowledged that inflation may be more stubborn than they currently expect. "If we see inflation moving well beyond what we consider consistent with our goals, and doing so consistently, the Fed would act to bring it down. The markets didn't like the Fed's duplicity: the dollar rose but gold, commodities, and stocks fell. The August Comex gold price (XAUUSD: CUR) fell 4.1% and was trading at $ 1,784 / ounce, which according to FactSet data represents the largest one-day decline since last November, while the July Silver Price (XAGUSD: CUR) fell 5.5% to $ 26.27 an ounce. Unsurprisingly, the gold mining stocks were not spared. The VanEck Vectors Gold Miners ETF (GDX) fell 5.5% on Thursday and a further 1.6% on Friday, representing a total loss of 10.2% over the last five trading days. GDX has a YTD yield of -4.47%. VanEck Vectors Junior Gold Miners ETF (GDXJ) lost 4.74% on Thursday and 9.47% in the last five trading days. GDXJ is down 11.2% in the YTD. This is a huge disappointment for the gold bulls as some Wall Street hedge funds have been extremely bullish on gold, with some targeting prices as high as $ 3,000 and even $ 5,000 an ounce. Summer is usually a quiet time for the markets, especially gold. But some Wall Street gamblers like OANDA's senior market analyst Edward Moya say it could be different this time around. Moya previously said that volatility could be excellent news as the precious metal prepares for a run towards $ 1,900. But now he's forced to change his mind: "The Fed's hawkish swing is a big joke brake for gold bulls that could provide some short-term sales impetus. Short-term Treasury yields will continue to rise and that should give the dollar some support, making commodities vulnerable."