- Volatility soars after the US data and after Powell’s speech.
- The Fed chairman maintains a hawkish tone, saying high interest rates will persist for some time.
- Gold under pressure, after a short-lived rebound above $1,750.
The Prayed is having a volatile session, still showing a negative bias after being unable to break through key short-term resistance levels. He has grounded at the beginning of Powell’s speech and then bounced back.
The yellow metal bottomed at $1,741, the lowest level in three days, and then rebounded to $175. Once again, the price failed to break out of the critical zone and then fell back below $1,750.
It remains in negative territory for the day and the possibility of a retest of $1,740 support remains, especially while below $1,750. If gold manages to break firmly above $175, the intraday outlook could change. Above the next strong barrier is seen at $1,770.
For gold price action, US yields are moving with no clear direction. The 2-year yield jumped to 3.45% and then retreated to 3.40%, while the 10-year Treasury yield hovered around 3.04%, below the level it was before Powell’s speech.
The Fed Chairman mentioned that higher interest rates will persist for some time, adding that the “historical record strongly cautions against premature policy easing.” Powell’s tone was considered “aggressive”.
The latest report on Friday showed a better than expected reading on the University of Michigan Consumer Sentiment Index for August, which came in at 58.2 vs. the market consensus of 55.2.
Earlier on Friday, a report showed that the price index for basic personal consumption expenditure fell 0.1% unexpectedly in July, the annual rate fell from 6.8% in June to 6.3% against expectations of 7.4% .
Technical levels
Source: Fx Street
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