Gold Price Analysis
- Gold prices[1] have bounced back into a key Fibonacci resistance level.
- Since setting a fresh seven-year-high in May, Gold prices have shown back-and-forth price action with little discernible long-term bias.
Gold Prices Return to Fibonacci Resistance
It’s been just about 24 hours since the Federal Reserve announced their most recent rate decision and already markets have begun to show fear. While the Fed did continue to highlight the expectation for continued low rates, FOMC[2] Chair Jerome Powell didn’t sound too upbeat about forward-looking economic conditions, particularly on employment. And given how far this risk-on rally has ran and how quickly it’s happened, it make sense that we see some element of caution showing the day after the head of the FOMC didn’t broadcast an upbeat tone on what they’re seeing on the horizon.
Of specific pertinence to those rallies, Chair Powell was asked of his opinion on the repercussion of the Fed’s recent actions, with an allusion to whether a bubble might be forming as equity markets in the United States rushed right back to their highs, even as the coronavirus continues to spread and certain states are in the midst of data spikes for both new infections and hospitalizations. Chair Powell firmly pointed out that the bank’s dual mandate has thus far been served by their actions; but at no point were those actions taken with equity markets in mind.
This is pertinent to Gold as the yellow metal has been well-bid over the past year-and-a-half, right along with the Fed shifting into a more-dovish stance. The story really started at the tail-end of the FOMC’s hiking cycle, around the open of Q4 in 2018. In the opening days of the quarter, Jerome Powell was asked directly
