Market news
17.05.2022, 18:43

Gold Price Forecast: XAU/USD drops on Fed's Powell's hawkish WSJ Q&A

  • Gold goes offered on a hawkish Powell as the US dollar rallies. 
  • The US dollar has popped out of a 15-min wedge formation to the upside. 

The gold price was changing hands between the bulls and the bears during the Federal Reserve's chairman Jerome Powell's interview with the Wall Street Journal. At the time of writing, as the event concludes, XAU/USD is trading offered as the US dollar picks up a bid. The yellow metal is down some 0.48% at $1,815.50, falling from a high of $1,836.15 on the day printing a low of $1,813.74. 

The US Dollar Currency Index (DXY), which tracks the greenback against six major currencies, was down 0.82% at 103.33, a touch away from the low of 103.226 ahead of the Powell event:

On hawkish rhetoric, the price has rallied out of the containment of the wedge formation as follows:

While well off the two-decade high made last week, which was made on the heels of strong inflation data and supported by a hawkish Federal Reserve, as well as worries over the global economic fallout from the Russia-Ukraine conflict, the bulls are stepping in again. As a consequence, the price of gold is suffering. 

''A failure to confirm the early morning strength would see CTA selling resume course to a large net short position,'' analysts at TD Securities argued. 

''With the Fed telegraphing their every move, Fedspeak will be increasingly important this week, particularly as bearish sentiment continues to undermine positioning. In turn, we continue to expect substantial selling flow to weigh on the yellow metal when liquidity is scarce.''

Gold technical analysis

The failure to close above a 61.8% ratio leaves the outlook bearish, in line with the broader bearish trend:

© 2000-2022. All rights reserved.

This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Feedback
Live Chat E-mail
Up
Choose your language / location