While dovish results of the Fed Chair’s Testimony and the FOMC Minutes initially triggered the markets’ run towards Gold, doubts over the US-China trade deal and likely escalation of geopolitical risk between the US and Iran added strength to the bullion buying as it took the bid around $1424 per ounce during today’s early session. In his semi-annual Testimony before the House Financial Services Committee, the US Federal Reserve Chairman Jerome Powell reiterated the downside risk to inflation while asserting a 25 basis point Fed rate cut. Following that, Minutes statement of the latest monetary policy meeting by the US FOMC also revealed that there are a few policymakers who are highly in favors more rate cuts. Stretching the moves are the latest round of news releases from the US and China that doubt the US President Donald Trump’s highly optimistic comments about the US-China trade truce. Additionally, rumors surrounding the US readying for an air strike in Syria, over Iranian targets, offered extra pace to risk-averse traders.
As expected, Gold prices headed to the upside and surged past the $1400 mark and printed fresh 8-day highs at $1427.02 per ounce. The price is currently retreating just below the $1422.59 resistance level as the overextended move take a breather. The momentum has still more room to go before entering the overbought zone. With that said, we will be focusing on the upside and this time the $1441.79 resistance level will be on our watch.
Support: 1410.78 / 1401.62
Resistance: 1422.59 / 1435.81