Investors eyes are focused on Jerome Powell today, as traders wait for words confirming the dovish monetary policy now expected by the markets. It seems the Fed should cut rates in July – this is already in current prices in the equity, FX and gold markets. The real question seems to be related to the longer term, as markets are now pricing as “likely” a second rate cut by the end of the year. If Powell does confirm a second cut, we could expect some further recovery on gold, after the price was hit by the solid US job figures last week and by the strength of the greenback.
In this scenario there are couple of prices levels to be monitored: the first support area is placed at $1,370/1,380, while $1,400 is now the first resistance. If bullion could recover this level (and hold above it), we could expect further attacks to the resistance area of $1,440, where the peaks of the last two weeks are placed.
