Gold is down for the fourth week in a row as markets are worried about how aggressive the Federal Reserve will have to be to bring inflation down to 2%.In response, gold struggled, with April Comex gold futures down 1.3% on the week and last at $1,851 an ounce.
The problem for gold is that the U.S. dollar has been climbing."The hypothesis that the U.S. dollar will weaken in a big hurry is being questioned," Melek said. The first is the new expectations for additional Fed tightening."The Fed is clearly going to remain aggressive in tightening. The 50 bps startled a lot of traders," Moya said."Even though half a point rate increase might not play out, the Fed will be hiking in March, May, and probably in June."The second thing to watch is recession risks, which will start climbing as the Fed continues to raise rates."It seems we are recession bound.