- Gold drops $30 on Powell's comments to $1,780.
- Powell confirms Fed tapering plans and sents gold plunging.
- XAU/USD’s dives to test support at $1.770/80.
Gold futures have reversed course on Friday’s US trading session. The yellow metal has lost about $30 in a matter of minutes, retreating from six-week highs at $1,813 to $1,780 on the back of Fed Powell’s speech.
Powell’s confirms QE tapering and gold plunges
Bullion has lost most of the ground gained earlier today, weighed by the US dollar’s bullish reaction to Federal Reserve chairman Powell’s words. Powell has reaffirmed the bank’s plan to start reducing its bond’s purchases and has played down the possibility of an interest rate hike in the coming months. The market reaction has favoured the dollar’s recovery, weighing on stock markets and commodities.
Gold prices had appreciated about 1% previously, favoured by increasing concerns about the persistently high inflation. Buoyed by its status as a traditional hedge against inflation pressures and a broad-based US dollar correction, the yellow metal was on track to post its best weekly performance in the last months.
XAU/USD’s reversal tests support at $1.770/80
Gold’s reversal has been contained at $1.770/80 previous resistance area. Below here bears might gain traction and send the pair towards $1,745 (October 6 low) before facing a key support area at $1,725 (September 29, 30 low).
On the upside, immediate resistance will be now at $1,807/10 (Sept. 15 high/Intra-day high) ahead of September’s peak. At $1.830 and 1,865 (Jun. 15 high).
Technical levels to watch
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