Gold (XAU/USD) was elevated in the session of Wednesday, initially being driven by the hope that Jerome Powell would hint at negative interest rates.
At the back-end of last week, the U.S. futures market was pricing in increasing chances of a negative interest rate being introduced in early 2021. It comes given the bad run of economic data and a lack of turning point, despite all of the QE already conducted by the FOMC.
The FOMC chair ruled out any chances of seeing the central bank slashing rates to negative, which took some of the wind out of the bulls push higher in XAU/USD. However, While we do not expect the Fed to go to negative policy rates, there is still plenty of other monetary tools at their disposal, which was made clear by Powell.
Keep in mind that Gold loves stimulus, the FOMC being ready to do more is great for supporting the prices of the precious metal.
As noted, price action has been very much within consolidation mode over the last four weeks, failing to find that extra momentum to force a big bull breakout. The technical structure shown in the above video contains the price, somewhat of a bullish pennant, subject to an eventual breakout higher.
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