Gold Prices React to Powell’s Speech – What’s Next for Investors?
Gold prices are under pressure with Powell’s speech in focus.
FUNDAMENTAL OVERVIEW
Gold prices exhibited minimal movement in the Asian trading session on Wednesday, following significant losses in the preceding two sessions. These losses were a reaction to hawkish statements made by Federal Reserve officials, causing traders to reassess their expectations regarding future interest rate increases.
All eyes are now on an upcoming speech by Fed Chair Jerome Powell, especially since his remarks at a recent meeting were viewed as less hawkish by the market. Last week, gold saw some gains following the Fed meeting and nonfarm payrolls report that fell below expectations, which fuelled hopes of the central bank potentially halting its rate hike cycle.
However, several Fed officials have played down the likelihood of a pause, emphasizing the need for additional rate hikes due to the robust economy and persistent inflation. This less optimistic stance has weighed on the outlook for gold, as higher interest rates reduce the attractiveness of investing in the precious metal.
GOLD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
Gold is currently trading within a up channel.
Gold is positioned below all Moving Averages (SMA).
The Relative Strength Index (RSI) is in the selling zone, while the Stochastic oscillator suggests a negative trend.
Immediate Resistance level: 1983.80
Immediate support level: 1963.89
HOW TO TRADE GOLD
Following a sharp increase, the price of gold encountered a resistance level and subsequently declined. Although it made an initial attempt to move higher, it struggled to maintain its gains. At present, gold has established a double-top pattern and is approaching a support zone. If this support level is breached, we could anticipate further declines in its price.
TRADE SUGGESTION- STOP SELL– 1952.90, TAKE PROFIT AT- 1917.20, SL AT- 1977.62.