Gold Price Analysis: Steadies above $1700 ahead of Powell speech
- Gold range play intact above $1700 amid a better market mood.
- Massive global coronavirus stimulus, second virus wave fears underpin.
- All eyes on remain on Powell speech for fresh direction.
Gold prices (XAU/USD) trade listless so far this Wednesday, moving back and forth in a $6 range just above the 1700 level, awaiting a clear direction from the US Federal Reserve (Fed) Chairman J. Powell’s speech.
Gold bulls will look for fresh insights on the Fed’s forward guidance, in light of the recent debate on the negative interest rates and the gloomy economic outlook, which could trigger a fresh sell-off in the greenback and boost the bullion prices.
The US Treasury yields are already trading with sizeable losses, amid negative rates chatter and softer-than-expected US core CPI figure, in turn, underpinning the non-yielding gold. Meanwhile, the yellow metal continues to derive support from the massive monetary and fiscal stimulus deployed worldwide to cushion the economic blow from the virus outbreak.
Further, a weaker start to the European markets also keeps the buoyant tone intact around gold, as fears over second virus wave and US-China trade tensions linger. In evidence of increased confidence in the precious metal, “SPDR Gold Trust holdings, the world’s largest gold-backed exchange-traded fund, rose 0.24% to 1,083.66 tonnes on Tuesday,” per Reuters.
Gold: Technical levels to watch
At the press time, gold trades modestly flat at 1703.20, with the further upside likely to gains traction only above $1712 levels (intermittent tops). On the flip side, the immediate downside is capped by the 50-hourly SMA at 1702.04, a break below which the 1700 level will be tested.
Gold: Additional levels