VOT Research Desk
In anticipation of a busy trading day on Wednesday, when important US economic data and Federal Reserve Chair Jerome Powell’s speech will take center stage, the price of gold is aiming to extend its rebound gains over $1,750.
The United States Dollar (USD), which had been in a four-day recovery phase, hit a wall in Wednesday’s trade, allowing Gold to restart its prior rise from close to $1,740.
The US Dollar is further hampered by the recent reversal in the yields on US Treasury bonds. Markets are repositioning their USD positions in anticipation of the release of a fresh batch of important US economic data, the highly anticipated speech by US Federal Reserve Chair Jerome Powell, and end-of-month flows.
For new perspectives on the condition of the US economy, the ADP Employment Change, JOLTS Job Openings, and Pending Home Sales statistics will be extensively examined among the US macro headlines.
The speech by Federal Reserve Chairman Powell, who will make hints about the future of the central bank’s monetary policy, will steal the show. Powell will speak at the Brooking Institution in Washington, DC, about the job market, inflation, and the economic outlook.
Before the Federal Reserve enters the blackout period before the monetary policy meeting on December 14, it will be his final appearance.
His address will therefore be of the utmost importance, particularly in light of the recent criticism from a number of Federal Reserve policymakers, which has delayed the narrative of a dovish Fed shift in the future months.
Markets are pricing a 65% likelihood that the US Federal Reserve would increase rates by 50 basis points (bps) the following month.
Gold Technical Analysis
On the four-hour chart, the gold price is about to produce a symmetrical triangle breakout. For the upside break to be confirmed, the brilliant metal requires a four-hour candle stick near to the $1,759 falling trendline resistance level.
Gold bulls may receive the much-needed lift if Fed Chair Jerome Powell supports the dovish tilt.
It is possible that the price will rise again toward the round $1,770 mark. The next upward objective is expected to be at the recent highs of $1,787.
Bulls remain optimistic since the Relative Strength Index (RSI) trades idly above the midline. On the other hand, there is substantial support at the $1,750 level, which is the point of convergence for the 21, 50, and 100-Simple Moving Averages (SMA).
If the latter is broken, the rising trendline support at $1,745 will be made visible.
A sustained slide below that level of support might signal a breakdown to the downside of the symmetrical triangle, allowing for more declines toward the $1,730 round number.
