June Comex Gold Jumps after Powell’s Less-Hawkish Comments

Gold futures are trading higher late in the day on Wednesday amid a drop in Treasury yields and the U.S. Dollar after the Federal Reserve Chairman Jerome Powell indicated that the central bank won’t get even more aggressive in raising rates.

At 19:20 GMT, June Comex gold futures are trading $1883.80, up $13.20 or +0.071%. The SPDR Gold Shares ETF (GLD) is at $175.62, up $1.53 or +0.89%.

The central bank raised its benchmark interest rate by half a percentage point on Wednesday. Powell said at a press conference that 50-basis-point increases are under consideration in the next two meetings. However, he said a 75-basis-point hike is not on the table for now.

“A 75-basis-point increase is not something we’re actively considering,” Powell said. “I would say I think we have a good chance to have a soft or softish landing, or outcome if you will.”

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher following the confirmation of Tuesday’s closing price reversal bottom.

A trade through $2003.00 will change the main trend to up. A move through $1849.70 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through $1921.30 will change the minor trend to up. This will confirm the shift in momentum.

The nearest resistance is a pair of retracement levels at $1897.70 and $1908.10. If the minor trend changes to up then look for a test of the 50% level at $1932.90.

Overtaking $1932.90 will indicate the buying is getting stronger with another resistance cluster at $1958.70 – $1965.90 the next target.

Daily Swing Chart Technical Forecast

The direction of the June Comex gold futures contract into the close on Wednesday will be determined by trader reaction to $1885.50.

Bullish Scenario

A sustained move over $1885.50 will indicate the presence of buyers. This could trigger a quick surge into $1897.70 and $1908.10. Overtaking the latter will lead to a test of the minor top at $1921.30.

Bearish Scenario

A sustained move under $1885.50 will signal the presence of sellers. If this creates enough downside momentum then look for a test of $1870.80. If this level fails as support then we could see a retest of the minor bottom at $1849.70.