short 4H Gold

Gold price (XAU/USD) is hovering near the edge of $1,950.00 after a sheer sell-off in the Asian session. The Gold price is expected to extend its losses as higher oil prices after OPEC+ decision of contracting production has renewed fears of a rebound in the United States inflation. Higher oil prices are likely to force factory owners to hike the prices of goods and services at factory gates, which will propel the Producer Price Index (PPI). Eventually, the US inflationary pressures would be fueled significantly.

The context of higher inflation expectations has infused fresh blood into the US Dollar Index (DXY). The USD Index has refreshed its weekly high above 103.00 as investors believe that the Federal Reserve (Fed) won’t have another alternative than to trigger rates higher. Fed Chair Jerome Powell might announce one more 25 basis points (bps) rate hike in May and will push rates above 5%.