Gold to see a wave of volatility due to Powell’s testimony and U
Today, the recent volatility in Gold could find a new trigger when the US inflation rate is published, and Fed chairman Jay Powell testimony on the economy before US Congress in the afternoon.
After the Fed cut came as expected, rates by 25 basis points on October 30, but didn’t deliver any significant further impulses or signs in regards to future monetary policy steps. The “data dependent” part in the Fed statement left market participants speculating that the Fed won’t deliver any dovish hints or a looser monetary policy announcement in the next few months.
“Obviously”, because in the first days of November 10-year US-Treasury yields took on bullish momentum, gaining over 20 basis points while Gold dropped significantly below 1,500 USD.
With expectations among market participants of another Fed rate cut by 25 basis points in December dropping to around 5%, indicating that such a step is very unlikely, so the bullish outlook for Gold darkened a little.
But, if US core inflation comes in below the expected rate of 2.4% and in addition to that Jay Powell’s remarks in front of the US Congress later that day raises fears around a rather sooner than later darkening US economic outlook, the yellow metal could make back at least some of the recent losses.
Still, only if Gold bulls succeed in breaking above 1,520 USD, another test of the current yearly highs around 1,557 USD would be possible, currently the mode seems short-term bearish.
Nevertheless, the overall technical picture on a daily time-frame looks still solid, didn’t significantly darken after the drop below 1,500 USD, but instead brings now a potential mid-term long trigger around 1,440/450 USD into play.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
After the Fed cut came as expected, rates by 25 basis points on October 30, but didn’t deliver any significant further impulses or signs in regards to future monetary policy steps. The “data dependent” part in the Fed statement left market participants speculating that the Fed won’t deliver any dovish hints or a looser monetary policy announcement in the next few months.
“Obviously”, because in the first days of November 10-year US-Treasury yields took on bullish momentum, gaining over 20 basis points while Gold dropped significantly below 1,500 USD.
With expectations among market participants of another Fed rate cut by 25 basis points in December dropping to around 5%, indicating that such a step is very unlikely, so the bullish outlook for Gold darkened a little.
But, if US core inflation comes in below the expected rate of 2.4% and in addition to that Jay Powell’s remarks in front of the US Congress later that day raises fears around a rather sooner than later darkening US economic outlook, the yellow metal could make back at least some of the recent losses.
Still, only if Gold bulls succeed in breaking above 1,520 USD, another test of the current yearly highs around 1,557 USD would be possible, currently the mode seems short-term bearish.
Nevertheless, the overall technical picture on a daily time-frame looks still solid, didn’t significantly darken after the drop below 1,500 USD, but instead brings now a potential mid-term long trigger around 1,440/450 USD into play.
Ready to start trading the live markets? Then open a free account with Admiral Markets - 8,000+ instruments to choose from, some of the market's tightest typical spreads, and the world's #1 multi-asset trading platform. admiralmarkets.com/start-trading/
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
