In last week's monetary policy report, Fed policymakers acknowledged that inflation is still too high, and there are no clear signs of easing in the service sector. Recognizing that the prospects for monetary policy remain largely uncertain, the leaders of the U.S. central bank nevertheless kept its parameters unchanged last Wednesday but acknowledged the need for further tightening. According to CME Group data, market participants are now assessing the probability of a 25 basis point rate hike in July at around 70%.

Furthermore, Fed Chairman Jerome Powell, speaking on Wednesday before the House Financial Services Committee, practically repeated the main theses of the accompanying Fed statement, stating that all FOMC members recognize the appropriateness of raising interest rates a bit further from current levels by the end of the year.

"Inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Powell said. "My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal, while it may make sense to raise rates at a more moderate pace."

"We will continue to make decisions from meeting to meeting based on incoming data, their implications for outlook and risk balance," Powell added.

Following Powell's speech yesterday, major U.S. stock indices accelerated their decline, and today their negative intra-week dynamics continued in the first half of the trading day.

However, the dollar failed to benefit from this: its DXY index broke the 102.00 level yesterday and has now dropped to 101.60, the lowest since May 12. Another dissonance is observed in the market: major U.S. and global stock indices are declining, along with the decline in the dollar and gold prices, but major commodity and European currencies are rising.

Today, Powell will once again testify before Congress, where he will discuss the prospects of the Fed's monetary policy. He will likely repeat his speech from yesterday without adding anything new to it.

Therefore, the dollar is likely to remain under pressure until important macro statistics start coming in from the U.S., which is scheduled for tomorrow: at 13:45 (GMT), preliminary indices (from S&P Global) of business activity (PMI) in the manufacturing sector, composite, and the service sector of the U.S. economy will be published. They are important indicators of the state of these sectors and the U.S. economy as a whole. Data above the value of 50 indicate an acceleration in activity, which positively affects the quotes of the national currency. The forecast for June is 48.5, 54.4, and 54.0, respectively.

However, if the indicator falls below the forecast, especially below the value of 50, the dollar may temporarily weaken sharply.

As for gold mentioned above, its quotes continue to decline today, while the XAU/USD pair is moving towards the lower boundary of the downward channel on the daily price chart, passing through the key support levels of 1916.00 and 1896.00. A breakout of these levels and the support level of 1885.00 will pave the way for a deeper decline towards the key long-term support levels of 1800.00 and 1750.00, separating the long-term bullish trend of gold from the bearish trend.

As is known, gold prices are very sensitive to changes in the monetary policies of the world's largest central banks, primarily the Fed.

Fed Chair Powell confirmed that the central bank will raise interest rates twice by the end of the year, not denying the possibility of further policy tightening.

The hawkish rhetoric of officials from the ECB and the Bank of England (on Thursday, the Bank of England raised interest rates by 0.50% to 5.00%) regarding the policy prospects of these central banks also continues to exert pressure on the precious metal.

Nevertheless, despite the decline in prices, global demand for gold still exceeds supply, and its available inventories on the COMEX for delivery decreased from 15.7 million ounces to 11.7 million ounces in the first quarter, a loss of 27.0% year-on-year.

Thus, the probability of a rebound from the support levels 1916.00 and 1896.00 is also high.