Gold prices surged 1.08% higher this Friday, with most of the rally occurring in the last hour after Fed Chair Jerome Powell gave the green light to start tapering the QE program in late-2021. In remarks rendered at the Jackson-Hole symposium, Powell also said that the inflationary surge would fade over time, dimming hopes of an earlier liftoff of the rate hiking cycle.
With the markets already pricing in the early start to tapering, the greenback lost strength soon after the speech, allowing the XAU/USD to break towards three-week highs.
Gold Price Outlook
The break of the 1789.49 resistance is now truly on, with price fast approaching the 1815.20 resistance after breaking past the 1800.00 psychological resistance. If the advance continues above 1815.20, the resistance zone between 1828 and 1840 comes under attack. Price needs to clear this zone for 1860.77 and 1881.68 to come into the picture as potential upside targets.
On the other hand, if bears defend 1815.20 successfully, a retest of 1789.49 could be on the cards. 1763.30 and 1741.01 remain downside targets in the line of sight if 1789.49 gives way.