Gold buyers back in near-term control, looks to retest the year's highs

Technical Analysis

Author: Justin Low | gold

Gold is among the main beneficiaries from dovish remarks by Powell

Gold H1 11-07
Following the release of Powell's testimony yesterday, gold shot up sharply and moved above its key hourly moving averages and also back above the $1,400 handle. That saw buyers regain near-term control and are extending the move higher in trading today.

Price is now challenging near-term resistance around $1,425 but the momentum is staying with buyers with the dollar holding weaker and buyers will be eyeing a move to retest the year's highs near $1,440.

There is some argument for the dollar weakness to not extend too much but for now, near-term sentiment is still overriding the bigger picture. In the short-term, there are some other risk events to look out for as well later today.

We'll get the release of US CPI data for June later at 1230 GMT before we hear from Powell again as he testifies before the Senate Banking committee this time around at 1400 GMT. US economic data will be of much importance now - particularly inflation - so keep an eye out on that. As for Powell, I would expect pretty much a similar message but we'll see what questions will be posed by the committee later today.

As for gold, the fundamental picture continues to gather more tailwind with the Fed keeping the door open for a more dovish tilt and major central banks around the world continuing to lean towards that stance as well.

Just wait until the day equities start focusing on why central banks are starting to ease rather than the idea of central banks easing and I reckon that will eventually give gold a second wind in the grand scheme of things.

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