Gold has been sitting in a relatively narrow range all week
Topside levels continue to be limited by the key hourly moving averages with the moves overnight failing to breach above the 100-hour MA (red line). Meanwhile, downside levels continue to be limited around $1,493.30 to $1,494.00 throughout the week.
Price is trading a little weaker to start the day but that owes to some mild strength in the dollar. Any key directional break will depend on the Fed message that will come via Jackson Hole later on in US trading.
Fed chair Powell’s speech is the one that markets are keeping their eye on but as mentioned earlier, do also keep your eyes and ears peeled for potential remarks by other Fed officials throughout the event.
A break back above $1,500 and above both key hourly moving averages – 200-hour MA (blue line) @ $1,507.00 – will see buyers regain near-term control and build the platform for a move higher in the coming week.
Meanwhile, a drop back below $1,480 may see a deeper correction in gold. However, all that will depend on what the Fed communicates over the next few days.
Less dovish remarks and those erring towards indecision ahead of the September meeting may take away some of the aggressive market pricing – which has pulled back somewhat – seen currently and that could see gold falling, vice versa.
Fed fund futures have a 25 bps priced in at 100% but only 0.5% odds of a 50 bps rate cut now, much lower from the ~18% odds at the start of the week.