Volatility soars after US data and following Powell’s speech.

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• Volatility soars after US data and following Powell’s speech.
• Fed Chair keeps hawkish tone, says high interest rates will persist for some time.
• Gold under pressure, after short-lived rebound above 1750$.

The pair currently trades last at 1751.22.

The previous day high was 1765.51 while the previous day low was 1750.0. The daily 38.2% Fib levels comes at 1759.59, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1755.92, expected to provide resistance.

Gold is having a volatile session, still showing a negative bias after being unable to break key short-term resistance levels. It bottomed at the begging of Powell’s speech and then rebounded.

The yellow metal bottomed at $1741, the lowest in three days and then rebounded, to as high as $1755. Again, the price failed to break the critical area and then pulled back under $1750.

It remains in negative territory for the day and the odd of another test of the $1740 support remains in place, particularly while under $1750. If gold managed to break firmly above $1755, the intraday outlook could change. Above the next strong barrier is seen at $1770.

Critical for gold price action, US yields are moving without a clear direction. The 2-year yield jumped to 3.45% and then pulled back toward 3.40% while the 10-year hovered around 3.04%, below the level it had prior to Powell’s speech.

Fed Chair mentioned that higher interest rates will persist for some time and added the “historical record cautions strongly against prematurely loosening policy”. The tone of Powell was seen as “hawkish”.

The latest report on Friday showed a better than expected reading in the University of Michigan’s Consumer Sentiment Index for August which came in at 58.2 against the market consensus of 55.2.

Earlier on Friday, a report showed the Core Personal Consumption Expenditure Price Index dropped in July by 0.1% unexpectedly, the annual rate declined from 6.8% in June to 6.3% against expectations of 7.4%.

Technical Levels: Supports and Resistances

XAUUSD currently trading at 1751.22 at the time of writing. Pair opened at 1758.68 and is trading with a change of -0.42 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1770.83, 50 SMA 1767.79, 100 SMA @ 1822.1 and 200 SMA @ 1838.01.

The previous day high was 1765.51 while the previous day low was 1750.0. The daily 38.2% Fib levels comes at 1759.59, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1755.92, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1750.62, 1742.55, 1735.11
• Pivot resistance is noted at 1766.13, 1773.57, 1781.64

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