By Barani Krishnan

Investing.com. It appeared invincible to the evil twins of dollar inflation and soaring gold prices for a while. Gold finally gave in to the rate-hike chants and fell 2% Thursday, breaking the $1,800 barrier.

Gold futures’ most active contract on New York’s Comex, , slumped $35.90 to settle at $1,789.20 — settling below the $1,800 level the first time since Dec. 22.

For yellow metal, the $1,830 resistance has been its Achilles heel. It has attempted to crack it numerous times over the past year.

It made another attempt at this on Wednesday, just before the release of the Federal Reserve meeting minutes for December that indicated the first pandemic-era U.S. rate hike might come as early as March — spelling a boon for the Treasury yields and the dollar and gloom for safe-havens such as gold.

“Gold’s recovery in late December appeared to be built on rocky foundations and the Fed minutes delivered a hammer blow to hopes of sustaining a move above $1,800 in the near term,” noted Craig Erlam, analyst at online trading platform OANDA.

To rein in inflation, the Fed has been increasing its tightening rate. This is allowing for the fastest growth in America in over 40 years.

Gold is almost always affected by news of rate increases. This was evident last year when it fell 3.6% to close 2021, its first annual decline in three years. Its sharpest slump since 2015!

But some analysts think that if the U.S. inflation theme remains strong through 2022, then gold could rebound, and even retrace 2020’s record highs above $2,100 — which, incidentally, came on the back of concerns about soaring price pressures.