Gold price pressured ahead of Fed’s Powell Testimony

Gold price remains pressured after breaking 100-DMA support during three-day downtrend. Risk aversion underpins US Dollar strength and weighs on the Gold Index.

Fears of economic slowdown originating from China, higher rates in the West roil sentiment and favuor gold sellers. Fed’s Jerome Powell’s bi-annual Testimony will be crucial to watch for the next clear direction of the precious metal.

Gold holds lower ground at the weekly bottom, licking its wounds after a three-day downtrend near $1,937, as market players prepare for this week’s key event, namely the bi-annual Testimony of Fed Chair Jerome Powell. Risk-negative headlines surrounding China, hawkish Fed news and upbeat US data allow the gold bears to remain hopeful.

Gold Price stays defensive at around $1,937 at the time of writing, probing a three-day downtrend near the weekly low, as it struggles to justify the risk-negative headlines.

US President Joe Biden on Tuesday called Chinese President Xi Jinping a dictator provided the XAU/USD pair’s recovery moves near the intraday high. The comments flag grim concerns surrounding the US-China ties after US Secretary of State Antony Blinken’s visit to Beijing failed to provide any major positives. The same should keep gold traders hopeful.

Earlier on the day, sentiment soured after the People’s Bank of China (PBoC) cut two key lending rates (Loan Prime Rate (LPR) and Medium-term Landing Facility (MLF) rate for the first time in almost a year.