Gold may have finally run out of steam
It’s been an impressive rally in gold over the last week in particular but it ran into a brick wall on Tuesday as Fed Chair Jerome Powell and FOMC voter James Bullard delivered a sprinkling of reality to investors.
The message was much less dovish than traders had taken away from the meeting last week – not by accident I’m sure – prompting a bounce in the dollar which in turn weighed on gold.
Gold Daily Chart
Interestingly, the rebound hasn’t been particularly strong and interest rate expectations haven’t adjusted too considerable which suggests markets remain engaged in a game of bluff with the Fed.
The rebound did occur around past resistance in gold – $1,440 – so perhaps the timing was convenient. The first test of support may come around $1,400.