Gold Prices Mildly Recover As Market Digest Powell Remark – Outlook Positive
Feb, 28th 10:33
Gold prices eased off a two-and-a-half week low on Wednesday, as markets took a breather after comments by Federal Reserve Chair Jerome Powell in the previous session weighed heavily on the precious metal.
Gold futures were steady at $1,319.5 a troy ounce by 02:00 a.m. ET (06:00 GMT), off Tuesday’s two-and-a-half-week low of $1,314.40.
Fed Chair Jerome Powell reiterated on Tuesday that the U.S. central bank would likely move forward with gradual increases in interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 90.29, after hitting a two-and-a-half week peak of 90.41 overnight.
Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Gold prices also recovered after data on Wednesday showed that China’s net gold imports increased by 65.2% in January. China is the world’s top gold consumer.
On the technical charts, GOLD is trading sideways below the 200 day EMA. The RSI is at 42.42 and the MACD is below the signal line.
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