- Gold prices are behind the previous bearish trend line, the short-term bias is bullish, and the market is pricing in a dovish Fed tilt.
- A move towards a 50% mean reversion can be seen while above $1,870.
Gold prices were little changed amid mixed US dollars across the board, pushing and pulling comments from Federal Reserve Board member Jerome Powell speaking at the Economic Club’s signature event in Washington, D.C. I finished the day at
He repeated what he did at the press conference following last week’s interest rate decision, but markets surged on the most dovish comments that were otherwise surrounded by hawkish rhetoric, and the US dollar fell to its knees. It collapsed due to the reaction.
As the market digested the comments, gold rallied again and traded between $1,865 and a high of $1,884. In Asia, gold prices are on the rise again, with a session high so far at $1,878.46.
Key comments from Fed Chair Powell
The jobs numbers were certainly stronger than anyone expected.
A powerful job report shows why we think this is a fairly time consuming process.
2023 is expected to be a year of significantly lower inflation.
We probably need more rate hikes.
If the data continues to be stronger than expected, rates will certainly rise further.
2% inflation is the global standard and not something the Fed wants to change.
Fiscal authorities are worried about the debt ceiling.
The debate on the debt ceiling can only end if Congress introduces it, and it has to happen.
Congress needs to raise the debt ceiling in a timely manner
No one should think that the federal government can protect the economy from the consequences if the debt ceiling is not raised.
We are not actively considering the sale of securities.
It will take several years for the Federal Reserve’s balance sheet to finish shrinking.
The US is “just at the beginning” of the disinflationary process.
The biggest concern is when disinflation will take hold in the larger services sector, and external events are also a concern.
China is increasing its gold reserves
Meanwhile, analysts at ANZ Bank said central bank buying remained strong as China raised its gold reserves for the third month in a row.
A TD Securities analyst explained the Shanghai chase: Money Trader positioning is collapsing. ”In the last five sessions, SHFE traders said he liquidated close to 13.4 tonnes of notional gold. This supports the view that Chinese buying activity, which has helped propel gold over the past few months, has been exacerbated by the Chinese New Year celebrations as China’s economy reopens,” the analyst said.
“While this suggests that a key pillar supporting gold’s recent rally is eroding, the pace of liquidation could slow as Shanghai traders’ positions are now slightly below average. This means investors could again become marginal buyers or sellers, with CTA Trend Followers taking the lead, but prices breaking the $1840 an ounce range. TDS analysts added that although they do not expect a significant downward trend until then, the margin of safety for the limit buying program is low.
gold technical analysis
As the chart shows, the gold price is behind the previous bearish trend line, so the bias is bullish, noting a move towards a 50% mean reversion while above $1,870.