Federal Reserve Chair Janet Yellen may not have said anything particularly new during the early stages of her testimony before the Senate Banking Committee on Tuesday, but something has got traders excited, with the dollar ticking higher since she started speaking which in turn has hit Gold.
Perhaps her reference to a rate hike being appropriate at one of the upcoming meetings as long as inflation and employment perform in line with expectations, put March back on the table with markets having previously all but written the meeting off. Even so, markets are still only pricing this in at around 18%, up from around 13% previously.
Source – CME Group FedWatch Tool
Gold fell back towards $1,220 during Yellen’s testimony before running into support, as it did on Friday and again on Monday. Following each of the last two tests, the yellow metal has gone on to make lower highs – $1,237 on Friday and $1,234 on Monday – which would suggest momentum is growing with the bears.
With Gold having already run into resistance just below $1,250 , which stood out as a key resistance level, before breaking below the rising channel it had been trading in, it would seem the Gold bull run may be running out of steam. A break below $1,220 would further support this, with $1,200 possibly offering further support below, followed by $1,180.
For more charting analysis, check out our latest video below.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.