Gold Unable to Beak Out of the Range, Awaiting FED’s Powell
Gold has been trading between 2 moving averages since April, with uncertainty keeping it rangebound, but let's see if Powell can change thin
Gold has been trading in a range between two moving averages for more than a month, although we saw a break on Thursday morning after the FOMC meeting last Wednesday, which eventually turned out to be false as the price returned back above the bottom moving average. As a result, Gold continued the range-bound trading and headed for the 50 SMA (yellow) at the top, which has been acting as resistance.
But, USD buyers returned on Friday afternoon and Gold returned lower, closing the day where it opened, which means an upside-down pin candlestick. That’s a bearish signal and yesterday Gold prices declined in thin trading due to a bank holiday in the US, as the U.S. dollar rebounded from its previous session’s lows. Market participants were looking ahead to FED’s chairman Powell’s testimony on Capitol Hill which starts later today, adding further to the cautious risk sentiment. Gold dropped 0.4%, dipping below $1,950 per ounce, while U.S. Gold futures fell 0.4% to $1,964.00. Although the price action was quite slow due to the closure of U.S. markets for the Juneteenth holiday.
So, Gold continues to trade between these two MAs, with the 100 SMA (green) at the bottom on the daily chart and today’s comments from Powell are not likely to push Gold to break out of its current range-bound trading between $1,940 and $1,980. Despite recent events, which failed to generate a breakout, including the hawkish tone from FED officials that raised expectations of a rate hike in July after the FED decided to keep rates unchanged in June, Gold prices have not experienced significant movement. The economic data throughout the week from the US is light apart from manufacturing and services reports for May on Friday. Besides that, we have the Bank of England and the Swiss National Bank meetings, both of which are expected to raise rates by 25 bps, although they’re not expected to have too much impact on Gold prices.
Gold Live Chart
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