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GOLD: Powell’s Comments Extend Pullback

GOLD
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Gold is 0.2% higher in today’s Asia-Pac session. After piercing $2,547.0, the Sep 18 low, early in yesterday’s session, bullion recovered as the US dollar gave up some of its gains. The yellow metal ended at $2,564/oz, 0.3% lower on the day.

  • Yesterday, US rates firmed after Chairman Powell's prepared remarks on the economy, delivered in Dallas, were released.
  • Chair Powell's speech contained several quotes that sounded similar to what he said at last week's press conference. As such, there is nothing really "new", but by the same token, there is nothing dovish here, which may help explain the hawkish market reaction.
  • "The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully."
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, the long-term trend condition in gold remains bullish, and the recent pullback appears corrective. However, recent weakness has resulted in a breach of the 20- and 50-day EMAs, signalling scope for a deeper retracement. Below $2,547, next support is seen at $2511.1, the Sep 12 low.
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Gold is 0.2% higher in today’s Asia-Pac session. After piercing $2,547.0, the Sep 18 low, early in yesterday’s session, bullion recovered as the US dollar gave up some of its gains. The yellow metal ended at $2,564/oz, 0.3% lower on the day.

  • Yesterday, US rates firmed after Chairman Powell's prepared remarks on the economy, delivered in Dallas, were released.
  • Chair Powell's speech contained several quotes that sounded similar to what he said at last week's press conference. As such, there is nothing really "new", but by the same token, there is nothing dovish here, which may help explain the hawkish market reaction.
  • "The economy is not sending any signals that we need to be in a hurry to lower rates. The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully."
  • Lower rates are typically positive for gold, which doesn’t pay interest.
  • According to MNI’s technicals team, the long-term trend condition in gold remains bullish, and the recent pullback appears corrective. However, recent weakness has resulted in a breach of the 20- and 50-day EMAs, signalling scope for a deeper retracement. Below $2,547, next support is seen at $2511.1, the Sep 12 low.