Fed Chair Powell Testimony Expectations and XAUUSD Direction Today
Fed Chair Powell Testimony Expectations and XAUUSD Direction Today
Based on
previous sentiments, there is a high possibility that Fed will require a confirmation
that inflation is slowing before approving interest rate cuts. This will happen
irrespective of the data-based evidence on the softer economic growth and
employment metrics.
·
Slower Inflation:
Recent data suggests inflation is on a downward trend, which is good news for
consumers.
·
Interest Rate Cuts:
Lowering interest rates can stimulate the economy by making borrowing cheaper.
However, it can also reignite inflation if done prematurely.
·
Confirmation Needed:
The Fed wants to see sustained evidence of slowing inflation
before cutting rates. This ensures it's not a temporary blip and inflation
won't surge again.
·
Softer Growth & Employment:
While economic growth may be slowing, the job market might still be healthy.
This creates a balancing act for the Fed - controlling inflation without
hurting employment.
Influence on XAUUSD (Gold
Price):
Lower Inflation: Generally, lower
inflation reduces the appeal of gold as a hedge against inflation. This could
put downward pressure on XAUUSD.
Slower Growth & Interest Rates: Slower growth can increase
uncertainty, potentially driving investors towards gold, a traditional
safe-haven asset. This could counteract the disinflationary pressure.
Fed Policy Stance: If the Fed
maintains its hawkish stance (keeping rates high), it could strengthen the US
dollar, putting further downward pressure on XAUUSD.
Predicted XAUUSD Direction 9th July 2024:
Buy Entry at 2365
Take Profit: Depending on Personal appetite.
Analytic Dave
AnalyticalDave is a personal financial analysis portfolio that captures my Derivatives trading, stock, and investing journey. My portfolio does NOT act as a financial advisor to any community. It is only purposed for journaling my story as a self-taught trader and investor.
