- Spot Gold bids set a new record high on Wednesday.
- XAU/USD touches $2,150 as markets devour Fed Chair Powell’s words.
- Fed’s Powell sees no recession, qualifies inflation outlook.
On Wednesday, Spot Gold prices surged significantly into bullish terrain, as XAU/USD marked a potential record peak at $2,150.00. The upward momentum in Gold is attributed to market enthusiasm spurred by the initial day of Federal Reserve (Fed) Chair Jerome Powell’s two-day appearance.
On Wednesday, Federal Reserve Chair Jerome Powell reassured that the Fed perceives no imminent threat of a US recession. Powell further elucidated the central bank’s stance on inflation, offering a nod to investors anticipating potential rate cuts. Emphasizing the ongoing progress in inflation, Powell mentioned the Fed’s patience in awaiting additional evidence to support the attainment of the 2% inflation target. Rather than seeking better overall inflation readings, US policymakers are inclined towards reinforcing what they have already observed.
The news from the Fed prompted markets to drive Spot Gold prices to unprecedented levels. Additionally, the shortfall in February’s ADP Employment Change, which came in at 140K compared to the forecasted 150K, contributed to market expectations of a more accommodative economic environment in the US. The previous month’s figure underwent a revision from 107K to 111K. As anticipation builds for the upcoming US Nonfarm Payrolls (NFP) report on Friday, markets are anticipating a moderation in the headline print to 200K, following last month’s 11-month high of 353K.
XAU/USD technical outlook
As XAU/USD continues to reach unprecedented highs, delineating technical barriers on the charts becomes challenging. Intraday price action, however, exhibits a degree of hesitation around the $2,150.00 mark, a level that recently witnessed a sharp rejection. Since surpassing the 200-hour Simple Moving Average (SMA) in mid-February near $2,015.00, Spot Gold has consistently traded on the bullish side.
The 200-hour SMA near $2,030.00 has served as a support zone, leading to multiple bounces for XAU/USD. The key technical barrier is progressively ascending towards $2,070.00, emerging as the nearest near-term price floor to counteract potential bearish pullbacks.
Spot Gold prices are poised to conclude positively for the sixth consecutive day, highlighting the sustained bullish momentum. XAU/USD has predominantly closed in the green or near-flat territory for all but two of the last fourteen consecutive trading days.
XAU/USD hourly chart
XAU/USD daily chart
