The precious yellow metal displayed around of bearish price action on Tuesday after the U.S. Federal Reserve Chair Powell signalled a faster conclusion of tapering asset purchases against rising inflation.
In his testimony before the Senate Banking Committee, Powell said, “The economy is very strong and inflationary pressures are high. It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases perhaps a few months sooner”.
Adding, the Federal Open Market Committee (FOMC) members would discuss the possibility of concluding tapering quicker at their next meeting on Dec. 14-15.
The (FOMC) announced after the conclusion of its two-day meeting on Nov. 3 that it will start winding down its $120 billion asset purchases this month, and it is expected to be concluded by mid-2022.
Looking at some of the key economic indicators this week, the U.S. jobs report (Non-Farm Payrolls) forecast data predicts hiring in the U.S. accelerated in November for the second month in a row.
With much volatility expected, the forecast states that 553,000 jobs were added in November, up from 531,000 in October.
Based on the technical aspect, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator remains negative/mixed, although bullish divergence is evident, while the Moving Average Convergence Divergence (MACD) supports a bearish bias.
Given the bearish risks that hold, along with negative signals, views a potential challenge of $1,757-64. Reassess from there as a potential rebound may arise.