Gold prices dropped to more than a one-week trough as the U.S. dollar strengthened. The greenback rose 0.1% against a basket of rival currencies. It made the yellow metal more expensive for investors using other currencies.

Spot gold is currently trading at $1,858.06 per ounce as of 0901 GMT.

Stephen Innes of SPI Asset Management noted that the Feds’ anticipated tapering encouraged investors to either book profits or cut their gold and currency positions. OANDA senior market analyst Jeffrey Halley added that the price movement showed that the speculators were heavily long on gold. He said the bullion has a support price at $1,856 but must remain in the $1,840-$1,845 range to maintain its bullish case.

Market participants shifted their focus on the June 15-16 meeting of the Federal Open Market Committee. The meeting will provide them with more clarity on the Feds’ view on rising inflation rates and potential changes in monetary policy. Morgan Stanley is expecting the central bank to be more flexible in its quantitative easing program.

U.S. consumer prices rose sharply and raised concerns about inflationary pressures. But Fed officials reiterated their view that inflation would be transitory.

In Japan, the central bank is expected to extend its pandemic-relief programs to support a still-fragile economic recovery. The Japanese economy contracted at 3.9% in the first quarter and has shown only a modest recovery to date. The Bank of Japan will hold a two-day policy meeting on June 17-18. And experts expect it to maintain its yield curve control targets of 0% for 10-year bond yields and -0.1% for short-term interest rates. It is also likely to continue its asset purchasing program, including exchange-traded funds and bonds.

In physical trading, gold demand in India and China improved last week as COVID-19 restriction eases. But dealers still had to offer discounts. Indian dealers offered discounts of as much as $12 per ounce. In China, dealer discounts fell from $20-$50 to $7-$12 per ounce against global benchmark spot gold rates.

On the technical front, Reuters technical analyst predicted that spot gold might break a support price level at $1,860 an ounce and slide down to $1,842.

In a related development, the U.S. Commodity Futures Trading Commission reported that market speculators cut their long net positions in COMEX gold contracts for the week that ended on June 8.