Gold Price Analysis: What to Expect from Fed Chair Powell’s Speech
As the gold price hovers near record highs, investors are eagerly awaiting Federal Reserve Chairman Jerome Powell’s speech for clues on the next interest rate cut. Here’s what you need to know:
Key Points:
- Gold price consolidates below $2670 record high ahead of Fed speeches.
- Market expects another rate cut with a 62% chance of 50 bps reduction in November.
- Fed’s dovish outlook and China’s stimulus optimism support gold price.
With the recent dovish comments from Fed Governor Adriana Kuglar and weak US economic data, expectations for another rate cut have increased. This sentiment, along with China’s stimulus measures, is keeping the US Dollar and Treasury bond yields in check, supporting a slight uptick in gold price.
However, traders are cautious due to the extremely overbought conditions on the daily chart, waiting for more clarity from the Fed’s remarks. The upcoming data releases, including US Durable Goods Orders and GDP, will also impact gold price movement.
Technical Analysis:
From a technical standpoint:
- Gold price remains in overbought territory, signaling a possible correction.
- RSI at 76 suggests a potential pullback.
- Key levels to watch: $2670 (resistance) and $2623 (support).
The direction of gold price will largely depend on Powell’s speech and market sentiment following the data releases. Stay tuned for more updates on gold price movement.
Gold FAQs: Everything You Need to Know
Key Facts:
- Gold is a safe-haven asset, used as a store of value during turbulent times.
- Central banks hold significant gold reserves to boost currency strength.
- Gold has inverse correlations with USD, Treasuries, and risk assets.
- Price movements are influenced by geopolitical events, interest rates, and USD performance.
Understanding these key facts about gold can help investors make informed decisions and navigate market uncertainties. Stay informed and stay ahead in your investment strategies.