Gold Trades Sideways amid Powell Dovish Stance

Investors are looking at what Federal Reserve chairman Powell has to say regarding the performance of the United States economy. Experts are also watching US-China trade talks, as well as economic data in America.

Why is Gold moving sideways?

Gold is trading down on Wednesday as it failed to consolidate gains following Fed Chair Jerome Powell’s testimony before the US Senate.

Powell affirmed that while current economic conditions and outlook are favorable, the Fed is seeing “some crosscurrents and conflicting signals.”

According to Powell, recent declines in energy prices will push inflation down to levels below the FOMC target of 2%. However, it would be short-lived.

According to FX Empire analyst James Hyerczyk, gold is trading flat as investors are showing indecision. Hyerczyk says that conditions favor a gold rally, but the market is still waiting for a catalyst.

“Fed Chair Powell continues his testimony later today, so he may be the next source of volatility,” Hyerczyk says. “The U.S.-North Korean talks are a minor event and U.S.-China trade talks would have to completely breakdown to fuel a major reaction in gold.”

XAU/USD is trading 0.15% negative on the day as the pair remains in consolidation mode just below the 1,330.00 level.

On February 20, Gold reached 10-month highs at 1,346.74, but it was rejected with the pair going down to 1,321.00 where it found support. Now, XAU/USD is trading in a small range between 1,320.00 and 1,330.

Silver experiences volatility, but it remains in its range

Silver is trading negative on Wednesday following a jump that pushed it up to 16.25, its highest level since June 27, 2018.

The move was fueled by Fed’s Powell dovish testimony; however, the pair couldn’t materialize gains and it was rejected again. Now it is trading negative below 16.00.

The XAG/USD’s reaction after Powell’s testimony was more violent than the experienced by Gold, but the outcome was the same, both metals are negative on the day now.

On the silver chart, the 16.25 area proved itself to be strong as it rejected the pair again, as it did on January 31 and February 20.

XAU/USD is currently trading around 15.86, 0.40% negative on the day. The pair is moving in a triangle between the dynamic support coming from January 21 and February 14 on the bottom, and the 16.20 area on the top.

Palladium pauses its rally

Palladium is trading negative on Wednesday for the first time in fourth days as investors are taking a breath on the rally.

XPD/USD traded as high as 1,570.00 on Wednesday, but following several breaking attempts, the pair was rejected and it is now moving around 1,556.00.

Copper in consolidation mode around 2.9450

XCU/USD is trading positive on Wednesday as investors took advantage of Fed’s Powell testimony.

The pair is moving sideways following its previous rally to 2.9702, the highest level since June 27, 2018. The pair is getting ready for a new leg on its rally, supported by the 2.9550 area.