Gold slumps on higher USD after Powell looks more optimistic in his testimonial Q&A

Gold is now trading around $1,317.00 a troy ounce in US session, down by almost 1.20% on a higher USD after the new Fed chair sounded more optimistic about inflation in his testimonial Q&A session than the initial prepared statement.

In his Q&A sessionbefore  the US Congress, Powell said that he sees some “high prices” (inflation) and that he has strengthened his outlook for the economy since December’17. Also, an upbeat US consumer confidence data is supporting the greenback right now. Gold made a daily low of around 1,313 till now.

Earlier, Gold dropped by 0.20% as a knee-jerk reaction after new Fed chair Powell said that market volatility won’t stop more rate hikes in his first testimonial statement, an holds nearby as Powell's statement opened doors for a steeper pace of rate hikes this year. 

At the same time of Powell’s testimonial text release, a deluge of US economic data was also out, which were mostly subdued and below market expectations (Core durable goods orders, wholesale inventories, trade balance).

The overall stance for the Gold is neutral-to-bearish after Powell’s Q&A session, in which he sounded more optimistic and the market is now slowly discounting 4 rate hikes in 2018 by 29% implied probability.

Technically for Gold, the 1,315 area is now immediate support and sustaining below that the 1305-1285 price zone may be visible soon. For any meaningful recovery, Gold must stay above the 1335-1340 zone for an extensio to the 1356-1366 area.