On Wednesday, gold is trying to recover the losses of the previous trading day.
In the middle of the American trading session on Tuesday, the price of gold dropped sharply. Investors reacted to statements by US Treasury Secretary Janet Yellen that the Fed may be forced to raise interest rates to avoid overheating the economy. Market participants took this announcement as a signal that the Fed will begin the process of phasing out its stimulating monetary policy earlier than expected.
Later, Yellen tried to remedy the situation and said that she did not recommend or predict a rate hike, but gold remained under pressure until the end of the day due to the strengthening of the dollar.
Yellen's statements once again showed that expectations related to changes in the FRS monetary policy are the main driving force of the market.
Investors are now awaiting comments from other senior Fed officials, including Chicago Fed President Charles Evans and Cleveland Fed President Loretta Mester. Questions also remain as to whether Biden will appoint Fed Chairman Jerome Powell for a second four-year term.
There are two key events on the economic calendar: the non-manufacturing PMI from the Institute for Supply Management (ISM) and the ADP National Employment Report.
Other metals are trading mixed today. Silver prices declined by 0.3%. Platinum and palladium were up by 0.5%.
On the chart, we mark another unsuccessful attempt to get out of the established price channel 1766.00-1795.00. Now the price is again in the middle of the range, which increases the uncertainty about the further vector of price movement.
The main scenario is growth from current levels to 1795.00.
An alternative scenario is a breakdown of intraday support at 1775.00 and a decline to 1766.00.
The current fundamental background is neutral. We consider longs from the levels of 1775.00 and 1766.00.
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