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This may reignite fears about the Fed tapering stimulus as it appears that the markets have sufficient liquidity to warrant a gradual withdrawal of its monthly bond purchasing program.
Looking back to 2013, two years of active reverse repo operations were followed by the Fed’s first interest rate hike after the global financial crisis in the end of 2015.
Meanwhile, the Federal Reserve’s balance sheet surpassed the $8 trillion mark last week, as the Fed carried out unprecedented monetary stimulus to heal the economy from the pandemic.
Technically, gold prices breached below the floor of an “Ascending Channel”, potentially leading to a bearish trend reversal.
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