Gold bulls cheer: Powell brings 50bp rate cut back into play

Source: Economic Events July 12, 2019 - Admiral Markets' Forex Calendar

After last week on Friday very solid Non-Farm Payrolls resulted in markets pricing completely out a 50 basis point rate cut by the Fed on her meeting on July 31, Fed chairman Powell's testimonial before the House Financial Services Panel on Wednesday brought such a deep rate cut back on the table – and Gold eyeing its current yearly highs around 1,440 USD again.

Powell said that a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than the Fed currently anticipates.

As a result, US yields tumbled again (even though 10-year US-Treasury yields held above 2%) and Gold aggressively pushed back above 1,400 USD.

While the economic docket is quite thin into the weekly close, the device in the yellow metal seems to be 'Buy the dip' and on the lower time-frames the region around 1,405/407 USD should be carefully watched as a potential long-trigger.

In general, we consider another serious attack at the region around 1,440 USD an option as long as Gold holds above 1,380 USD:

Source: Admiral Markets MT5 with MT5-SE Add-on Gold Daily chart (between April 12, 2018 to 11 July 2019). Accessed: July 11, 2019, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of Gold fell by 1.7%, in 2015, it 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%, meaning that after five years, it was up by 6.4%.

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