The bullion dropped around 1% on Tuesday and continued to trade under pressure on Wednesday as the greenback regained ground after somewhat hawkish Powell’s testimony. The precious metal was trading near 1,318 USD during the London session on Wednesday.
Jerome Powell had a premiere yesterday and he testified on the Semiannual Monetary Policy Report before the House Financial Services Committee in Washington DC. He acknowledged the good state of the US economy and also confirmed inflation will most likely rise to 2% later in this year. Powell also said he sees some high prices (probably meant valuations on the US stock market), which sank stocks. Overall, his first public appearance sounded positive and slightly more hawkish and bonds, bullion and stocks were sold, while the greenback rallied.
The market now fully priced in three rate hikes this year, although the more optimistic investors are expecting at least one more. This is not priced in yet.
Today’s US calendar will contain the preliminary GDP reading for the final quarter of 2017, which is projected to stay near 2.6%. This might also be gold negative.
Gold is now nearing the important support around 1,308 USD and if broken, the bullion might deteriorate to the psychological level of 1,300 USD. On the other hand, the resistance is seen slightly below 1,325 USD and if bulls will be stronger, the next selling zone appears to be near 1,335 USD. In all cases we strongly recommend to have rigorous money and risk management.
Non-Independent Investment Research: Any information which could be construed as investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
No Representations/Warranties: None of the information contained herein is intended to an shall not constitute any offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy. This information is produced only for value added marketing and/or informational purposes and no member of the Goldenburg Group makes any representation or warranty, and assumes no liability, for the accuracy or completeness of the information provided herein. In providing this information, neither the content provider nor any member of the Goldenburg Group has taken into account the investment objectives, special investment goals, financial situation, and specific needs and demands of any recipient and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner. No member of the Goldenburg Group assumes any liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation.
Risk Warning: All investments entail risks and may result in both profits and losses. In particular, investments in leveraged products, such as, but not limited to foreign exchange, derivatives and commodities can be very speculative and profits and losses may fluctuate both violently and rapidly. Speculative trading is not suitable for all investors and all recipients should carefully consider their financial situation and consult financial advisor(s) in order to understand the risks involved and ensure the suitability of their situation prior to making any investment, divestment or entering into any transaction. Any mention herein of any risks may not be, and should not be considered to be a comprehensive disclosure or description of such risks. Any expression of opinion is personal to the author and may not necessarily reflect the opinion of any member of the Goldenburg Group and all expressions of opinion are subject to change without notice (neither prior nor subsequent).
Past Performance Is No Indication: This website may make reference to past performance. Past performance is not a reliable indicator of future performance. Indications of past performance displayed on this website will not necessarily be repeated in the future. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past or that significant losses will be avoided.
Forward-Looking Statements: Where there are statements contained in this website which are not historical facts, such statements could be data obtained as a result of simulated past performance or future performance based on current expectations, estimates, projections, opinions and beliefs of members of the Goldenburg Group. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this website may contain forward-looking statements. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. None of any opinions that may be inferred from the contents of this website is intended to be relied upon as advice or recommendation of any action. They are intended merely as articulations of personal musings and speculations factually.