Prediction of the price of gold – Gold fails to burst despite comments by Dovish Powell

Gold prices first climbed after the Fed Chairman's speech. Fed Chairman Jerome Powell said rates were just below the neutral range, which the market saw as a dovish sign. This helped the 2 year yield to decline, allowing the dollar to prepare for rising gold prices.

Technical Analysis

The price of gold rebounded after following its support near the moving average at 1,214 days. The resistance is seen near the 20-day moving average at 1220. The additional support observed below the 50-day moving average is a rising trend line connecting the August troughs and the October low. of 1 205. The hour became neutral, the MACD histogram (moving average with divergence of convergence) printing near the zero index level with a flat trajectory reflecting the consolidation.
The fast stochastic also shows a neutral dynamic. The Relative Strength Index (RSI) has a value of 52, which is in the middle of the neutral range and reflects consolidation.

Fed takes the risk of bouncing back

The 2-year yield fell 5 basis points following Powell's speech. The Fed chairman said the central bank would depend on data and continue to fight for a neutral policy. Stating that the Fed was close to a range that would be considered neutral, Powell reduced expectations that the Fed would increase its rates by 100 basis points in 2019. The markets now believe that its price is correct , which could curb the upward momentum of prices. dollar. Since the price of gold is in dollars, a weaker dollar will bring an added benefit to the yellow metal. The next Fed meeting is scheduled for December. Currently, the market has a 100% chance that the Fed will raise interest rates in future meetings. The markets will now focus on March 2019. Based on Powel's comments, the market now believes that stronger data will be needed for the Fed to raise rates.