Gold price is holding its ground well above the $1,700.00 psychological handle today after yesterday’s not-as-dovish-as-expected speech from Fed Reserve Chairman Jerome Powell. There are no market-moving US data due for today.
In case you missed it, Fed Reserve Powell dismissed talks of negative rates in his speech yesterday. While he acknowledged that the US economy needed more help in order for it to recover, he said that fiscal policies could provide a solution along with some support from the central bank.
The 4-hour time frame of gold price shows that XAUUSD is still trading within its symmetrical triangle. By connecting the highs and lows from April 14 to today, this chart pattern becomes apparent. When you sign up to our coaching program, you will be taught that this is often considered as a neutral indicator. That is, until the market breaks out of the triangle.
With that said, keep tabs on the highs of May 8 at $1,723.07. A close above this level would effectively break resistance at the top of the triangle. It could mean that there are enough buyers in the market. Gold price may then rally higher to its April 23 highs at $1,738.48.
On the other hand, if XAUUSD is unable to close above this level, it could mean that gold price still has some sellers left in the market. With this, the precious metal could fall to the bottom of the triangle at $1,693.77 where it also coincides with the lows of May 11. A close below this price could also indicate bearish momentum which may push gold price to its May 7 lows at $1,681.27.