Gold bulls target $1485/oz

Gold prices rallied in Asia but stalled and started to deteriorate in European markets into consolidation before a sell-off emerged on the back of less dovish than expected rhetoric from Fed speakers on New York. Gold met the March 2011 resistance at $1,439 and ended the New York session at 1423, having travelled between $1,412.11 and $1,439.31.

The greenback rallied hard on the back of Fed's Bullard who stated that a 50 bp cut would be too aggressive in July but advocated for a 25bp cut instead. This was catching the markets off guard ahead of Fed's governor Powell speaking in  New York later that day. Powell said the rate-setting Federal Open Market Committee was "grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation," in prepared remarks. He also stated that the number of tariffs currently in place is not large enough to [directly] have an economic impact, but the uncertainty they bring is impacting the confidence of financial and agricultural markets. However, August gold still managed to settle at $1,418.70 an ounce, the highest finish for a most-active contract since August 28, 2013.

Gold levels

The price action is once again mixed and leaves a mixed outlook on the charts. The technical momentum indicators remain in overbought territory. "Given that we think this rally will have some legs, we opt to adjust our target to $1485/oz & stop to $1330/oz rather than taking profits," analysts at TD Securities called following Powell folding his cards of late, sending real rates sharply lower, and gold firmly higher.