Gold, XAU/USD, Fed, Jerome Powell, US GDP, Technical Evaluation - Speaking Factors:Gold costs surged within the aftermath of the FOMC financial co
Gold, XAU/USD, Fed, Jerome Powell, US GDP, Technical Evaluation – Speaking Factors:
- Gold costs surged within the aftermath of the FOMC financial coverage determination
- Broadly still-dovish stance undermining Treasury yields and the US Greenback
- Softer US second-quarter GDP knowledge might supply additional XAU/USD momentum
Anti-fiat gold costs climbed over the previous 24 hours following Wednesday’s FOMC financial coverage announcement. The central financial institution left benchmark lending charges and the tempo of quantitative easing unchanged, as extensively anticipated. The small print of the assertion, in addition to Chair Jerome Powell’s press convention, depressed the US Greenback and Treasury yields.
When each the latter are falling, it tends to bode effectively for XAU/USD on condition that it’s a non-yielding asset. There was a kneejerk response to the Fed. Markets had been initially spooked by the assertion because the central financial institution famous that the economic system made progress to its most employment and worth stability objectives. Policymakers famous that they’re nearer to tapering.
Nonetheless, the temper shortly reversed course because it quickly turned clear that the central financial institution remains to be fairly dovish. Powell stated that the labor market is ‘some methods off’ earlier than reaching substantial additional progress. He reiterated that inflation is transitory. Treasury yields shortly turned decrease as his commentary possible steered that tapering remains to be not fairly across the nook simply but, opening the door to optimum inventory market circumstances.
The primary estimate of US second-quarter GDP is due over the remaining 24 hours. Annualized development is predicted at 8.5% q/q from 6.4% prior. Atlanta’s Fed GDPNow Q2 actual development estimate has been notably trending decrease since April, at present standing at 6.4%. A softer-than-expected consequence might underscore the central financial institution’s hesitation. If such a outcome depresses bond yields additional, gold might proceed benefiting.
Gold Technical Evaluation
Gold costs could also be readying to increase latest beneficial properties after costs not too long ago pierced a near-term falling trendline from earlier this month on the 4-hour chart beneath. This additionally follows optimistic RSI divergence, exhibiting that draw back momentum was fading. Extending beneficial properties may even see costs goal for the July 15th excessive at 1834. That will additionally depart XAU/USD again above the 200-period Easy Transferring Common.
XAU/USD 4-Hour Chart
Chart Created Utilizing TradingView
–— Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the feedback part beneath or @ddubrovskyFX on Twitter
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