Gold price remains exposed to downside risks. As FXStreet’s Dwahine Mehta notes, XAU/USD eyes 2022 low at $1,681 amid aggressive Fed rate hike bets.

Aggressive Fed tightening bets

“Hotter-than-expected US inflation jacked up bets for a 75 bps Fed rate hike to 94% while bringing talks of a 100 bps lift-off back on the table. Further, the data squashed speculation surrounding the Fed lowering rates next year.”

“The next downside target is seen around the $1,690 support area, below which the 2022 lows of $1,681 will be tested once again.”

“On the flip side, gold buyers need acceptance above Monday’s low of $1,712 to sustain the recovery momentum. The $1,720 round number and the 21-DMA, now at $1,727, could offer strong resistance to the optimists.”

See – Gold Price Forecast: XAU/USD could sink as low as $1,451/40 on a close below $1,691/76 – Credit Suisse