- The Gold price is correcting to a 38.2% Fibonacci retracement level.
- The Gold price bears are lurking around Federal Reserve's hawkish tones.
Gold price closed with its third-straight gain on Wednesday despite a firmer US Dollar that was recovering in a phase of hawkish Federal Reserve sentiment following Friday's US Nonfarm Payrolls job report. Gold price travelled between a low of $1,869.20 and $1,886.33 on the day.
Federal Reserve speakers out in force
Federal Reserve chair Jerome Powell on Tuesday said the central bank will stay the course despite strong economic data which gave rise to the bin in the Gold price. The Federal Reserve's mantra that interest rates will stay higher for longer, however, came to light on Wednesday which underpinned the hawkish take of comments from Federal Reserve Jerome Powell's Economic Club of Washington on Tuesday when he said rates might need to move higher if the US economy remained strong.
Federal Reserve's John Williams reinforced that interest rates were “barely into restrictive territory”, and rates would need to stay at a restrictive level “for a few years to make sure we get inflation to 2%”. Federal Reserve's Lisa Cook argued that they “need a restrictive policy for some time to cool prices”. Federal Reserve's Neel Kashkari emphasised that the “services side of the economy is still hot”, noting the lack of progress on core services inflation ex-housing. As a consequence, the US Dollar was able to run higher in the US session which helped the Gold price bears with a sell-off in the cash open on Wall Street.
Gold price technical analysis
The Gold price is correcting to a 38.2% Fibonacci retracement level within a 1000 pip box and a bias to the downside for the coming times while below $1,900 and on the backside of three weeks of rise.
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