Gold prices fell to a two-month low in the thursday (February 23/February) evening trading session. Gold futures plunged by 0.7% to $1829.40, while spot gold prices fell by 0.2%.

It comes to $1822.18 an ounce. The XAU/USD chart also shows a fall of 0.19% to the level of $1820. The latest Fed minutes released early this morning still imply the hawkish sentiment. 

The FOMC participants highlighted the extremely tight conditions of the US labor market and high inflation. Besifrd that, the majority of meeting members still anticipate further interest rate hikes. 

In this regard, the prospect of inflation still becomes a key factor that will determine the direction of monetary policy. The only way to combat inflation is to raise interest rates.

Jobless Claim in USA Declined 

Furthermore, the only way to eliminate that is when consumers are out, but the reality is that consumers haven't come out yet; they are still still buying. This was said by Bob Haberkorn.

Bon is an analyst at RJO Futures. The current set of United states economic data still supports interest rate hikes. Weekly Jobless Claims in America declined, US GDP rose by 2.7%, and PCE inflation strengthened convincingly. 

Haberkorn said that while GDP figures missed slightly than expectations, a drop in United States jobless claims supported the Fed's. It is especially to raise interest rates. 

President of the New York Fed, John Williams, said that the US central bank is clearly committed to lowering inflation to the level of 2%. The trick is through a decrease in demand with limited supply avenues. 

Three More Rate Hikes are Needed

Williams' statement was in line with James Bullard's. As the St. Louis Fed President, he reiterated his view that the Fed's interest rate level in the range of 5.25% to 5.5% would be enough to lower inflation to the 2% target. 

Fed Fund Futures now expects three more Fed rate hikes to reach the range of 5.25%-5.5%. High interest rates are currently a threat to the bullish price of gold as a non-yielding asset.

Elsewhere, The US dollar maintained its gains entering at the beginning of the European trading session onFriday (23/February). Currently, the market is looking forward to one of the important inflation reports for the Fed. 

Right now, the USD index is having a slightly strengthening by 0.1% to 104,588. That was actually not far from the 7-week high that had been reached in the previous session. 

US labor Market is Still strong 

Besides that, the official dollar is on the path of strengthening for 4 consecutive weeks. Fourth-quarter United States GDP growth was revised lower in the previous session. 

However, a number of other economic data signal a solid picture of the US economy. Weekly jobless claims project that the Labor market in America is still quite strong. 

This is also supported by a solid jobs report at the beginning of the month. Retail data publications and business activity also recovered to an 8-month high in February. 

The situation further supports the Fed's decision to continue raising their interest rates in an effort to dampen inflation. It is estimated that there will be at least two to three times the increase of as much as 25 basis points this year. 

Major Pair Moves Mixed

Today's focus will be on the core Personal Consumption Expenditures Price Index (PCE) report. Experts expect an increase of 0.4% for month over month type and 4.3% (year-on-year). 

In comparison, core PCE inflation reached 4.4% in the previous month based on a data. The USD/JPY was 0.1% higher against the Japanese yen to 134.79.

That was happened after Kazuo Ueda indicated that it would maintain loose monetary policy in the near term. These dovish comments come as Japan's inflation hits its highest level in 41 years.

This was also putting Ueda potentially under pressure to take action in the near term. GBP/USD also gained 0.1% to 1.2018 in response to reports of UK consumer confidence hitting a 2-year high.