Gold prices have surged to retest $2500/oz ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium. This comes after a retracement during Thursday’s US session, fueled by a stronger US Dollar, rising US Yields, and potential profit-taking. The market is eagerly anticipating Powell’s remarks, with many hoping for confirmation of September rate cuts.
The market appears to have already priced in the likelihood of September rate cuts, following a downward revision to US jobs data. The recent weakness in the US Dollar and the rise in Gold suggest that expectations for a rate cut may already be factored into the market. Despite confirmation from several Fed policymakers supporting rate cuts, Gold struggled in the US session, indicating that a September rate cut may be largely priced in.
There is a sense of apprehension regarding the potential impact of Powell’s speech. While there may be volatility in the market due to other Federal Reserve policymakers speaking as well, the direction of Gold prices may not see significant changes based on Powell’s remarks. Attention will be focused on any mention of a potential 50 bps cut in September, as well as the overall trajectory of rate cuts through 2024.
From a technical standpoint, the rebound in Gold during the European session has been strong, with the precious metal surpassing the $2500/oz mark. The recent dip allowed for bulls to reload and for new buyers to enter at a more favorable price point. Despite yesterday’s bearish engulfing candle finding support at 2472, Gold has continued to show resilience. Immediate resistance levels for today’s US session are seen at 2514 and 2531.66, with support at 2484 and 2472.
As Gold prices retest $2500/oz ahead of Fed Chair Powell’s speech, the market remains cautious yet optimistic. While the potential for September rate cuts may already be priced in, Powell’s remarks could still have an impact on the direction of Gold. Investors will be closely watching for any signals of further rate cuts or unexpected developments in the financial markets. Despite the uncertainty, Gold continues to maintain its strong position, with key levels of support and resistance guiding its movements.