Gold traders to focus on Powell’s testimony on Wednesday
Source: Economic Events May 13, 2020 - Admiral Markets' Forex Calendar
Gold has generally been stable over the last days, trading around 1,700 USD.
That may surprise, given the fact that US economic data sets from the labour market came in at "catastrophic" levels with the ADP printing at -20.2 million, and Friday's NFP's at -20.5 million, which shows how much of the bad economic data seems to have been already priced into the markets.
On Wednesday, the main focus will probably be on the testimony from Fed chairman Powell in front of the US congress, regarding the economic impact and how any developments after the lockdown are to be lifted.
In fact, given the already massive monetary and fiscal stimulus from the US government, and the Fed's fight against the economic impact of the lockdown, the comments from Powell need to point to a significantly weaker than already anticipated picture to trigger higher volatility in financial markets, especially Gold.
Still, a new sharper leg up stays a serious option, bringing the region around 1,750 USD back into focus in the days to come.
On the other hand the bearish divergence in the RSI(14) on a daily time-frame (orange) is still a topic and would be confirmed with a break below 1,660 USD, making a deeper corrective move as low as 1,630/35 USD possible.
Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between February 11, 2019, to May 12, 2020). Accessed: May 12, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of Gold fell by 10.4%, in 2016, it increased by 8.1%, in 2017, it increased by 13.1%, in 2018, it fell by 1.6%, in 2019, it increased by 18.9%, meaning that after five years, it was up by 28%.
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