On Wednesday, gold ended its growth by more than 1%, amid a weakening dollar and lower yields on American treasuries, after the speech of Fed Chairman Jerome Powell in the US Congress. According to Powell, the economic outlook has not improved in recent weeks. Uncertainty in international trade and the deterioration of the situation in the global economy continue to have a negative impact on the economic situation in the United States. Many investors considered these statements to be a signal that the regulator could lower the interest rate at the FOMC meeting, which will take place at the end of this month.
Later published minutes of the June meeting of the FOMC confirmed the market expectations regarding the possible easing of monetary policy in the US in the coming months. Many participants in the meeting believe that it is reasonable to ease monetary policy in the short term in the face of declining economic activity in the country and a slowdown in inflation.
Today, the focus of the market again will be news from the US. Powell’s re-performance in Congress is likely to have a significantly weaker impact on bidding, but data on the consumer price index in the United States can significantly change the balance of power in the market.
Also pay attention to the publication of the minutes of the last meeting of the ECB, which can balance the position of the dollar and the euro, thereby having an impact on the yellow metal.
On the chart, the bulls once again managed to defend support at 1383.00 and turn the price up. Thus, we have formed a fairly wide horizontal channel, with borders at the levels of 1383.00-1438.00, in which the price can continue to move in the medium term. If we consider the situation more locally, then we should expect the development of a correction to the level of 1407.00, from where upward movement can be resumed.
Resistance Levels: 1425.00, 1438.00, 1445.00;
Support levels: 1407.00, 1383.00, 1360.00.
The main scenario - a correction to 1407.00 and the resumption of the upward movement.
An alternative scenario - the breakdown of support at 1407.00 and a decline to 1383.00.
A positive news background locally prevails in the market, therefore, within the day we consider long positions that can be searched for at the level of 1407.00.