Gold Price Analysis: Bulls and bears jostle around $1,930
- Gold prices await a clear direction after Thursday’s volatile trading that crossed $1,975 before declining to $1,910.
- The US dollar’s strength, backed by Fed Chair Powell’s speech, plays a big role.
- Hopes of witnessing the break to the American stimulus deadlock, receding virus numbers add to the market optimism.
- Day 2 of Jackson Hole Symposium and the usual risk catalysts will be in focus.
Gold traders catch a breath near $1,930, currently at $1,927.45, during the pre-Tokyo Asian session on Friday. The yellow metal had action-packed day, $65 move in almost 60 minutes, before a few hours when Federal Reserve Chairman Jerome Powell propelled market moves. Following that chatters concerning the US coronavirus (COVID-19) stimulus entertained the bullion traders amid a light calendar.
Slow but not-out…
US Fed Chair Powell announced the central bank’s bearish bias backed by the readiness to easy for longer-term amid the new Average Inflation Targeting (AIT) method. The Fed leader’s move was already in talks but hints for the longer-run employment and inflation numbers, mostly downbeat, suggested that the easy money will be here.
The US dollar cheered the Fed’s decision while snapping a two-day winning streak. The moves also exerted downside pressure on gold that marked the heaviest losses in the last seven days. The reason for the bullion’s weakness could also be traced from the surge in the US treasury yields and upbeat performance of Wall Street benchmarks.
Furthermore, global leaders are preparing to have the COVID-19 vaccine first and the virus numbers are also receding off-late, which in turn keeps the risk-on mood on the table. Additionally, the US policymakers are inching closer to discuss the stimulus as the latest comments from US House Speaker Nancy Pelosi suggest further easing of the Democratic demand on the virus package total.
While the aforementioned catalysts question the market’s rush for risk-safety, the continuous drama surrounding the US-China relations and the global economic hit due to the deadly virus can keep the metal strong enough. It should, however, be noted that the commodity’s immediate moves may be challenged by the speeches from the Jackson Hole and second-tier data from the US.
Technical analysis
A short-term triangle between $1,950 and $1,910 seems to restrict the metal’s short-term moves.