Gold's new year rally stalls amid market uncertainty

NEW YORK (Feb 15) Despite a solid start to the year, the momentum for gold has faltered in recent weeks.

This corrective move has caused the price of gold to drop from a high of $1,959 to its current price of $1,835.

The broader market is showing signs of needing to reconsider its optimistic stance on inflation, causing policymakers to debate whether inflation will continue to decrease or if rates need to be raised more aggressively.

With the Federal Reserve previously priced in at the terminal top of around 5.20%, the possibility of a move towards 6.00% due to economic data could be a cause for concern. The strengthening dollar and recovery in Treasury yields have also played a role in the dip in gold prices.

Technically, the charts indicate that gold is likely to test its 38.2 Fib retracement level at $1,828.70 before potentially reaching support at $1,800.

Gold bulls are hoping for a reversal in the current trend and a price rise. However, with market uncertainty and the possibility of economic data pointing towards the need for further rate hikes, it remains to be seen if gold will be able to recover its momentum in the short term.

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