Gold futures erased their losses during the Monday trading session, as the US dollar rally lost momentum. Still, the yellow metal is trading at its worst level in more than a month following its meteoric ascent. With the Federal Reserve promising higher interest rates for longer, investors turned ultra-bearish on the precious metal. Will gold now be on a permanent downward trend for the rest of 2022?

October gold futures ended the Monday session relatively flat, but they slipped more than 0.1% to $1,747.50 in overnight trading on the COMEX division of the New York Mercantile Exchange. Gold has been trading sideways over the last week, leaving its year-to-date decline intact at about 4.5%.

Silver, the sister commodity to gold, maintained its descent to under $18. October silver futures shed $0.127, or 0.68%, to $18.43 in overnight trading. The white metal slumped more than 2% last week, officially sending silver prices into a bear market of 21%.

Gold, like other assets, has been sliding since Fed Chair Jerome Powell confirmed in his Jackson Hole Economic Symposium speech that the central bank will raise rates as high as needed to curb inflation. This forced investors to price in a 75-basis-point rate cut at the September Federal Open Market Committee (FOMC) policy meeting.

The metals market is sensitive to a rising-rate environment because it lifts the opportunity cost of holding non-yielding bullion.

While gold is a conventional safe-haven asset, investors are apprehensive because precious metals do not generate a yield.

The Treasury market was mostly in the red, with the benchmark ten-year yield down 1.7 basis points to 3.093%. The one-year bill added 3.7 basis points to 3.451%, while the 30-year bond shed 2.1 basis points to 3.227%. The spread between the two- and ten-year yields was -36 basis points.

Gold has also been beaten on a strengthening greenback. The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, has soared more than 13% to nearly 109.00. In Asian trading, the DXY edged up 0.04% to 108.88.

A stronger buck is bearish for dollar-denominated commodities because it makes it more expensive for foreign investors to purchase.

So, where could gold prices be headed?

“Gold bulls’ upside price objective is to make a form above solid resistance at $1,800 and bears’ near-term downside price objective is pushing futures prices below solid technical support at $1,700,” said Jim Wyckoff, the senior analyst at Kitco Metals, in a note.

In other metal markets, October copper futures fell $0.0245, or 0.68%, to $3.5875 per pound. October platinum futures shed $8.50, or 0.99%, to $845.80 an ounce. October palladium futures tacked on $4.70, or 0.22%, to $2,135.00 per ounce.