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Gold prices slipped anew on Wednesday as the U.S. dollar continued its upward trend. The greenback jumped to its highest since March 2020 and is on track for its best month since 2015. The Federal Reserve’s anticipated aggressive rate hikes and the slowdown of the Chinese economy boosted the demand for the dollar. And since it is gold’s main rival as a safe-haven asset in times of political and economic uncertainty, a strong dollar makes the bullion less attractive for investors using other currencies.

Spot gold is currently trading at $1,898.06 per ounce as of 0730 GMT.

Despite the negative impact of the firm dollar, the yellow metal found some support from the Russia-Ukraine war. Russia halted gas supplies to Bulgaria and Poland, which deepened the rift between Moscow and the West. Though gas supplies to Poland resumed on Wednesday. Ukraine President Volodymyr Zelensky accused Russia of blackmailing Europe over energy to break its allies. Poland is among the European countries seeking the toughest sanctions against Russia. But 50% of its gas supply comes from Gazprom.

Moreover, Moldova reported attacks on its breakaway Transdniestria region. Zelensky said Moscow showed what to expect if it continued to support Kyiv. He also expressed concerns that Russia could use the region as a launchpad for new attacks.

City Index senior market analyst Matt Simpson commented that though headlines from Russia provided some relief for the bullion, the crisis has not been a bullish story recently. He doesn’t see a bright outlook for gold since the dollar soared to a 25-month high. Simpson said the $1,900 level would be pivotal for today’s session.

DailyFX senior strategist Christopher Vecchio added that gold’s bearish momentum is accelerating. He cited a combination of technical patterns and indicators that suggest more weakness ahead.

First, the rising U.S. real yields and the dollar surge serve as formidable headwinds. Second, gold prices have fallen below their daily 5-, 8-, 13- and 21-EMAs, and the daily MACD is now below its signal line. Also, the daily Slow Stochastics are now in the oversold territory.

Vecchio said that the continued decline in gold volatility in April weakened its ability to sustain a strong rally. He also mentioned that the IG Client Sentiment Index indicates a bearish bias in the near term.