Recent macro data releases from the US and statements from Fed bankers suggest that the Fed will raise interest rates at its May meeting. This is a significant turnaround from expectations a few weeks ago, when not even a 50% probability for a hike was given. Currently, the probability for a 25bp hike in May is rated at 88%, but on the other hand, the probability for a hike in June is rated at 29%, so adding up the probability, it is expected that a hike will happen anyway.
From the current market perspective, we are seeing a decidedly stronger dollar, which is gaining along with treasury yields, which are above 3.6% for 10-year treasury yields. In addition to this, the BoJ is hinting that there should be no change in the yield curve management program at its April meeting, which is also propping up the dollar. In response, gold is losing heavily and falling not only below $2,000 per ounce, but already below $1,980 per ounce. Silver, on the other hand, is below $25 per ounce and losing almost 2%.
Gold is falling to its lowest level since early April. The next important support near the 23.6 Fibo retracement at $1950 per ounce. Source: xStation5
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