The precious yellow metal displayed a volatile, choppy session on Tuesday, as the recent goldrush eased (somewhat) as the US Dollar Index dollar reversed some losses after U.S. Federal Reserve Chair Jerome Powell eased some of the concerns about higher interest rates and inflation.
The U.S. economic recovery “remains uneven and far from complete”, Powell told a committee of U.S. senators on Tuesday.
In his semi-annual update on monetary policy, his first delivered under Joe Biden’s presidency, Powell indicated the Fed would not be changing monetary policy any time soon, given the slow recovery in the labour market.
Fed Powell, as he has done in recent weeks, downplayed their concerns over aid sparking inflation said, “This is not a problem for this time, as near as I can figure,” noting that the Federal Reserve has tools to challenge rising inflation rates should they be seen.
On Wednesday, Powell’s visit to Capitol Hill will continue when he addresses the House of Representatives Financial Services Committee.
Reviewing the technical aspect, the choppy session overnight, the $1,801-03 support remains intact (even though it was breached), however, the New York close, prices remained above this level.
Until we witness a close beneath this point, the upside objective holds to $1,828-31, possibly, higher to $1,845-55.
The Relative Strength Index (RSI) 3-daily ‘lookback’ indicator holds above the 50-midway point (positive), while the Moving Average Convergence Divergence (MACD) is potentially able to cut the 0.00 axis, which in terms would marry up to the positive signal of the RSI.
Conversely, witnessing a move beneath the support at $1,801-03 would negate the bullish call and shift the attention back to $1,760-65.