Gold steady on lack of data, investors eye Powell testimony

Gold has posted small losses in the Monday session. In North American trade, the spot price for one ounce of gold is $1326.29, down 0.13% on the day. In economic news, there are no major events out of the United States. On Tuesday, the U.S. posts CB Consumer Confidence. As well, Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.

Investor optimism continues to rise as there are further signs that trade tensions between the U.S. and China are easing. The parties concluded a fourth round of talks last week. President Trump had said that he would raise tariffs on Chinese goods from 10% to 25% on March 1, but hinted last week that the deadline was flexible. On Sunday, Trump tweeted that he was waiving the deadline, since the parties had made “significant progress”. Trump added that he was open to meeting with Chinese President Xi, if there was further progress. The trade war between the U.S. and China has disrupted international trade and dampened global growth, so a breakthrough in the trade talks would raise risk appetite, which could mean further losses for the yen.

The Federal Reserve will be back in the spotlight this week, as Fed Chair Jerome Powell testifies before congressional committees on Tuesday and Wednesday. The Fed has been decidedly dovish early in 2019, in sharp contrast to 2018, when the Fed raised rates four times in order to keep the red-hot U.S. economy from overheating. However, the global trade war has taken a bite out of global growth, and the U.S. economy is unlikely to repeat last year’s performance. The markets will be listening closely for hints regarding future interest rate policy.

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XAU/USD Fundamentals

Monday (February 25)

• 10:00 US Final Wholesale Inventories. Estimate 0.3%. Actual 1.1%
• 11:00 US FOMC Member Clarida Speaks

Tuesday (February 26)

• 10:00 US CB Consumer Confidence. Estimate 124.3
• 10:00 Fed Chair Powell Testifies

*All release times are EST

*Key events are in bold

XAU/USD for Monday, February 25, 2019

XAU/USD February 25 at 12:30 EST

Open: 1328.06 High: 1332.61 Low: 1325.23 Close: 1326.29

XAU/USD Technical

XAU/USD edged higher in the Asian session. The pair dipped in European trade but recovered some of these losses. The pair has edged lower in North American trade

• 1326 is under pressure in support and could break in North American trade
• 1344 is the next resistance line
• Current range: 1326 to 1344
  

Further levels in both directions:

• Below: 1326, 1306, 1284 and 1261
• Above: 1344, 1365 and 1392

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