Gold declined last week amid prospects of progressively more aggressive monetary tightening by the Federal Reserve moved further and further in the forefront. Consequently, strategists at TD Securities expect the yellow metal to fade any rallies.

Fed will continue to emit very hawkish policy signals for a while yet

“Talk of a possible 75 bps increase in the Fed Funds rate at Wednesday's meeting, a robust USD and a slide in prices, prompted money managers to aggressively cut their net long gold exposure.”

“Given that high food and energy prices are here for a significant period of time and considering that inflation is well-rooted in the economy, it is very likely that the US central bank will continue to emit very hawkish policy signals for a while yet. This implies that any rallies, like the one over the last few days, may have a limited life span and long liquidations may be a fact of life well into the second half of the year.”