Gold Price Bounces As Fed Chair Powell Caves

New York (Nov 29)  On Wednesday, Fed Chair Powell caved into pressures from the president and Wall Street and magically turned from a hawk to a dove. The change was a magic act that the world’s great magicians would be proud of.

Before the announcement, gold was under pressure, testing major support. Once the Fed chair did his magic, gold reversed course, rallying $18 from the lows. With one word, the Fed reversed the dollar from up to down, equities from flat to exploding higher and the metals from struggling to a big rally.

Interestingly enough, the rally in gold was not a surprise. It was expected based on the pattern it has been trading for months. Once again, gold looks poised for a potential breakout to the upside. The key level to watch is $1,240. A close above there would bring gold to $1,275.

Reuters