Home Sales Solid, Jerome Powell Testifies

The past week has been a big one for Federal Reserve Chairman Jerome Powell. Inside of seven days, Powell has delivered both September’s Fed Announcements and COVID-19 Congressional testimony. Today has brought the latter, with Powell and Treasury Secretary Mnuchin answering questions regarding the United States’ economic response to the pandemic.

Thus far, Powell has reinforced the Fed’s commitment to do whatever it takes to foster economic growth. Here are a few of this morning’s highlights:

• “We [Fed] remain committed to using our tools to do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.”
• “Economic activity has picked up from its depressed second-quarter level, when much of the economy was shut down to stem the spread of the virus.”
• “Many economic indicators show marked improvement.”
• “Both employment and overall economic activity remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.”

In short, the testimony brought more of the same from Powell. On a different note, today’s U.S. real estate numbers are looking good. Existing Home Sales (August) came in at 6.00 million, right on expectations (6.00 million) and above July’s figures (5.86 million). American home buyers are active, seizing the opportunity to get in on historically low mortgage rates. The result has been record-high prices as housing supplies have tightened up dramatically.

Gold Falls To 1900.0 Following Powell’s Testimony

For the second consecutive session, December GOLD futures are testing the 1900.0 handle. If it gives way, a test of August’s Low (1874.2) may come into play.

Here are the key levels to watch in this market for the next few sessions:

• Resistance(1): Daily SMA/Bollinger MP, 1948.8
• Support(1): August Low, 1874.2

Overview: Perhaps the most important observation to be taken from December gold’s daily chart is the pending Daily SMA/Bollinger MP crossover. Should it develop, the stage will be set for a test of August’s low in the very near future. At this point, a short-term bearish bias toward gold is appropriate with all eyes on the 1900.0 handle.