Gold is down 0.3% to around $1,740 currently
The low earlier hit $1,735.60 but gold is holding around a key short-term technical level around $1,740 currently on the session.
The post-Fed knee-jerk reaction saw gold jump above the short-term resistance around $1,740 but buyers never really got to trying to push towards $1,760 and the momentum may be starting to fizzle out now that Treasury yields are surging higher.
The Fed essentially offered two sides of the coin for gold investors to digest and it will come down to how ETF positioning takes to that in the coming days/weeks.
On the one hand, the Fed maintained that they would need to see actual and sustained improvement in economic data before withdrawing stimulus.
Adding to that is the dot plots revealing no median rate hike for 2023.
That said, market pricing didn't really change all too much as eurodollar futures are still roughly pricing in a rate hike for March 2023.
The other side of the coin sees the steeper for longer narrative and as yields continue to climb, that also threatens to undermine gold prospects - especially if real yields also climb in tandem, which is a negative factor for gold.
At the end of the day, it will come down to how these two sides parse through to ETF positioning and investor appetite. If there isn't any improvement to the already dire picture as pointed out here, gold is likely to come under more pressure moving forward.
Looking at the chart, the key near-term support levels for gold at $1,721-30 are going to be pivotal in trying to limit the downside. Otherwise, that will put $1,700 and the early March lows close to $1,680 back in focus next.
