· Gold steadies as market awaits Powell remarks
Gold prices were little changed on Tuesday as investors awaited comments on U.S. economic health from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen later in the day.
Spot gold was almost unchanged at $1,738.50 per ounce by 0736 GMT, after declining as much as 0.5% earlier in the day as the U.S. dollar strengthened along with Treasury yields. U.S. gold futures were up 0.1% at $1,738.90 per ounce.
“Based on current levels of Treasury yields as well as the dollar, gold might have overshot its fair trading value. From here, it looks increasingly difficult to rally, especially if Treasury yields continue to rise,” said Howie Lee, an economist at OCBC Bank.
“This week after the dust is settled and we get a better picture of how individual Fed members are thinking, we will probably have a better idea of Fed’s direction from here and that would pave the way for gold’s direction.”
The U.S. economy is “much improved,” Powell said on Monday, but at the same time warned that the recovery was still “far from complete.”
The dollar index was up 0.1% against a basket of currencies, supported by firm U.S. Treasury yields.
· Gold Price Analysis: XAU/USD to slide towards $1700 on a break below $1730
Gold edged lower for the second consecutive session on Tuesday, albeit lacked follow-through. Technically, XAU/USD defends the ascending trend-line/200-hour SMA confluence, as FXStreet’s Haresh Menghani notes.
See – Gold Price Analysis: XAU/USD to hover around $1850 by end-March 2022 – Deutsche Bank
Key quotes
“The focus will remain on Fed Chair Jerome Powell and Treasury Secretary Janet Yellen's joint testimony on the quarterly CARES Act report before the House Financial Services Committee. Traders will further take cues from the broader market risk sentiment, the US bond yields and the USD price dynamics to grab some meaningful opportunities.”
“Gold, so far, has managed to defend the 200-hour SMA, near the $1730 region, which coincides with a two-week-old ascending trend-line and should now act as a key pivotal point for short-term traders. A convincing breakthrough will mark a bearish breakdown and turn the XAU/USD vulnerable to accelerate the slide towards the $1700 mark. Some follow-through selling will set the stage for a drop towards retesting multi-month lows, around the $1677-76 region.”
“The $1740-42 supply zone might continue to cap the immediate upside. A sustained move beyond might trigger a short-covering move towards challenging the previous strong horizontal support, now turned resistance near the $1760-65 region. Above the mentioned barrier, the metal seems all set to aim back to reclaim the $1800 mark in the near-term.”
· Gold Price Prediction: Symmetric Triangle in Play, Brace for a Breakout
Daily Technical Levels
Support Resistance
1729.39 1744.94
1720.17 1751.27
1713.84 1760.49
Pivot Point: 1735.72
GOLD is trading with a neutral bias, trading at a $1,736 level amid a weaker dollar and increased safe-haven appeal. It is now gaining support around the 1,723 marks along with a resistance level of 1,755. The MACD and RSI support a buying trend now, whereas the 20 & 50 periods EMA are also suggesting a bullish bias. On the 2 hourly timeframes, the precious metal is gaining support at a 1,737 level that’s extended by an upward trendline. Gold can exhibit buying trading with an immediate target of 1,755 level. Good luck!
· Elsewhere, palladium slipped 1.1% to $2,587.69, trading close to a more than one-year high of $2,755.18 hit on March 18.
“Palladium provides a good reflation alternate because the market is in such a massive deficit and it’s projected to be in a deficit in 2021 and the need is high,” said Stephen Innes, chief global market strategist at financial services firm Axi.
“You’ve got a deficit because of the mine closures, but it is going to take a lot longer to repair ... now it’s a couple of months, which is going to continue to weigh on the massive deficit we think is building.”
· Silver fell 0.6% to $25.61 and platinum was down 0.3% to $1,179.32.
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