Daily Brief, Feb 12 – Everything You Need to Know About Gold Today
Arslan Butt • 2 min read
Good morning, traders.
On Wednesday, we don’t have much, except the Fed Chair Powell’s testimony. Powell will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee in Washington DC. His remarks can help determine further movements in the market.
USD – Fed Chair Powell Testifies – 15:00 GMT
The Federal Reserve Chair Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC. Let’s see if Powell has anything to say about recent changes in tariff and trade activities, and how he plans to deal with this. Secondly, the discussion about macroeconomic factors like inflation, GDP, and the unemployment rate will help us drive the sentiments regarding the rate hike.
Gold Outlook – Choppy Session Continues
The yellow-metal prices are flashing red and lost some momentum mainly after the Federal Reserve Chairman Powell ignored the impact of coronavirus on the US market and said that the US economy has been stable against coronavirus outbreak so far
GOLD futures for April delivery on New York’s COMEX settled down $9.40, or 0.6%, at $1,570.10 per ounce. Powell said that the Federal Reserve was closely observing the emergence of the outbreak and its impact on China and the world, despite the resilience of the American economy and jobs sector. It is worth mentioning that the coronavirus will not have long-term effects, as a result Federal Reserve Chairman Powell decided to unchanged its rate cut decision. Whereas, recent strong jobs numbers could keep the Fed from cutting rates as well. All this is keeping gold in its trading range of $1,550-$1,600.
By the way, the latest numbers from China’s Health Commission revealed that there are 1,638 new cases of coronavirus infected people from Hubei. Compared to the previous day’s 2,097 cases, the disease seems to decrease gradually. Moreover, the World Health Organization (WHO) has already said that the vaccine could be ready in 18 months, giving a boost to the risk-on sentiment.
There are many reasons behind the risk recovery; the first one could be the latest comments from the global rating giant S&P that assumes the disease impacts to reverse from early 2021. Moreover, the reopening of factories in China, as well as the liquidity support and other steps from China to tame the side effects of the outbreak, also play their role in keeping the risk-takers happy.
Looking forward, the second day of the Fed Chair Powell’s testimony, today in front of the Senate Banking Committee, will likely offer fresh details of the Federal Reserve’s future action, so that why traders will closelyobserve today. At the data front, the US Consumer Price Index and Retail Sales, as well as Michigan Consumer Sentiment, will be the key events to watch.
Daily Support and Resistance
Pivot Point 1572.92
The technical side of the yellow metal gold hasn’t changed much as it continues to follow the same trading range of 1,573- 1,560. Today, gold is again expected face resistance around 1,573 along with the support around 1,564 and 1,560.
Eyes will be on the Fed Chair Powell, who is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee in Washington DC. His remarks can help determine further movements in the market. Good luck!