Federal Reserve chair Janet Yellen’s testimony to congress yesterday exposed that the central bank is not expected to raise interest rates in their next meetings in order to reach the neutral fed funds rate. Gold prices climbed following Yellen’s testimony to trade at 1221.50.
According to Yellen’s statement, The Fed “continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time”.
Technical Outlook
Gold prices are trading around the resistance level as you can see in the 4H chart, but did not break above the line. This might reflect a consolidation mode.
The daily chart formed the “Falling wedge pattern”. In this pattern, a break above the resistance line of $1227 will signal a bullish trend.
The next days are quite imperative, as traders look for direction. If gold unable to break above $1227, sellers will be under control. Further bearish movement could reach $1195-$1984 level once it breaks below $1204.