• Gold hits over 2-week low on aggressive and hawkish Fed approach.
• US Policymakers dictate that interest rate hike of 50 bps is going to feature in May.
• China’s covid spread and Ukraine crisis hits the investors’ confidence, keeping the bullish sentiment around the US dollar.

Gold prices fell against the US dollar during Monday trading session amidst strong US dollar backed by aggressive and hawkish U.S. Federal Reserve approach to tightening monetary policy.

The risk off market sentiment due to China’s covid spread to Beijing, Ukraine crisis and concern bout aggressive Fed rate hikes favors the greenback at the bullion’s cost.

Fed chair Jerome Powell in his testimony at the International Monetary Fund (IMF) meeting on Thursday mentioned a 50 basis point (bps) interest rate hike on the cards. This has bolstered the possibility of an event of a jumbo rate hike announcement by the Fed in May monetary policy.

Additionally, He also reported that multi-decade high inflation in the US economy is demanding a quick pace for interest rate elevation, which raises expectation that the investors should brace for more than one 50 bps rate hike announcement by the Fed this year.

U.S. officials arrived in Kyiv late on Sunday and held talks with President Volodymyr Zelenskiy, an aide to the Ukrainian leader said, as Russia’s invasion entered a third month.

Harsh restrictions in China have also begun to spread to Beijing, where more than a dozen buildings have been locked down, as concern grows about the economic damage of the shutdown of Shanghai.

XAU/USD 4 Hour Chart:

Support: 1919.6 (S1), 1908.4 (S2), 1890.5 (S3).

Resistance: 1948.7 (R1), 1966.6 (R2), 1977.8 (R3).

The risk off market sentiment favors the greenback as it is backed by hawkish fed against the safe-haven gold, we expect a bearish trend for XAU/USD.