Gold Hits Weekly High – a Dovish Fed Surprises the Market
Arslan Butt • 1 min read
Safe haven prices increased due to Powell’s speech about rate cuts. During the Asian market opening, gold prices surged dramatically as the US Federal Reserve Chairman Powell indicated that it’s planning to cut the interest rates despite a recent release of a strong US jobs report.
GOLD futures trade at $1,426 bullish, adding over 1% for the day. The Federal Reserve Chairman Jerome Powell said that the central bank will take proper action on growing economic uncertainties and slowing business investment.
The precious metal is presently is trading near a 6-year high due to the expectation of aggressive rate cut this month, which will increase the demand for non-interest-bearing securities.
Gold – XAU/USD – Technical Outlook
Fellas, gold is trading exactly as we forecasted to bounce off over $1,384 support zone. The immediate resistance that gold buyers can face is $1,427, the double top level.
On the side of the leading indicator, gold has entered the overbought the zone which is one of the signals for a bearish correction. Secondly, gold has closed a bearish engulfing pattern on the 2-hour chart, which demonstrates that bears are taking control.
Key Trading Level: 1409.39
Our forex trading signal is to stay bearish in gold below $1,421 with a stop loss over $1,425 and take profit of around $1,418.