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Gold is at a critical level ahead of the Jackson Hole Symposium

Thursday, 22nd August 2019 12:49 - by Rajan Dhall

Gold is hanging around $1500/oz as traders await more clues to the path of futures monetary policy.

 

Yesterday we received the latest Fed meeting minutes and there was no real mention of any kind of bazooka package offered by the ECB. Initial equity traders were disappointed but we must remember that we have heard from many Fed members since the last month's rate decision.

 

Fed Chair Powell has been under some serious pressure from the US President on social media. Trump has been making some characteristically ridiculous comments about the Fed Chair saying "he is like a golfer who can't putt" in reference to his monetary policy stance. He also thought it was a good idea to suggest a 100bps cut and the restart of QE. 

 

Elsewhere, in the futures markets that have been some massive bets on a shift to a more dovish stance. The markets are now pricing in a 98% chance of a 25bps cut at the September Fed rate decision. 

 

Looking at the technicals on the 4-hour gold futures chart, you can see prices are at elevated levels. Powell is speaking tomorrow at 3pm London time and I have mapped out the key support and resistance levels. If he is indeed dovish the next level up that is not on the chart is $1565.7/oz. On the downside $1488.6 is key as a break will mean it continues the short term pattern of lower highs and will make a new lower wave low. At the moment the market is very hesitant and tentative... all eyes on Powell tomorrow.

 

 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.

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