Gold price took a hit earlier this week with hawkish Powell being the prime reason behind the move. Fed Chair strongly hinted during his semiannual testimonies in Congress that pace of rate hikes may accelerate back to 50 basis points. This has led to a major repricing on Wall Street, USD market and US bond markets. As US yields jumped, precious metals, including gold, took a hit. GOLD plunged around 2% on Wednesday and moved back towards the $1,800 support zone.
Taking a look at GOLD at D1 interval, we can see that recent price action suggests that a period of range trading between $1,800 and $1,855 may be ahead. The lower limit of the aforementioned range is marked with previous price reactions as well as 100-day moving average (red line) while the upper limit is marked with only previous price reactions. GOLD is likely to be active tomorrow when the US NFP report for February is released (1:30 pm GMT). However, we may have to wait until the FOMC decision (March 22, 2023) for a trigger for the next big move on GOLD. Should FOMC decide to accelerate tightening and go on with a 50 basis point rate hike, precious metals may find themselves under pressure.
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Source: xStation5
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