Gold Price Reacts to Powell’s hawkish comments

Gold goes offered on a hawkish Powell as the US dollar rallies. The US dollar has popped out of a 15-min wedge formation to the upside.

The US Dollar Index was down 0.82% at 103.33, a touch away from the low of 103.226 ahead of the Powell event. On hawkish rhetoric, the price has rallied out of the containment of the wedge formation. While well off the two-decade high made last week, which was made on the heels of strong inflation data and supported by a hawkish Federal Reserve, as well as worries over the global economic fallout from the Russia-Ukraine conflict, the bulls are stepping in again. As a consequence, the price of gold is suffering.

The gold price was changing hands between the bulls and the bears during the Federal Reserve’s Chair Jerome Powell’s interview with the Wall Street Journal. As the interview concluded, the Gold Index is trading offered as the US dollar picks up a bid. The yellow metal is down some 0.48% at $1,815.50, falling from a high of $1,836.15 on the day printing a low of $1,813.74.

A failure to confirm the early morning strength would see CTA selling resume course to a large net short position,” analysts at TD Securities argued. With the Fed telegraphing their every move, Fedspeak will be increasingly important this week, particularly as bearish sentiment continues to undermine positioning. In turn, we continue to expect substantial selling flow to weigh on the yellow metal when liquidity is scarce.”

Technically, the failure to close above a 61.8% ratio leaves the outlook bearish, in line with the broader bearish trend.