Gold’s recent rally took a breather overnight as traders booked profits ahead of Federal Reserve Chair Jerome Powell’s much-anticipated Congressional testimony.
The precious metal soared to a new high on Tuesday, with spot gold (XAU/USD) surging to $2,142.54 an ounce on a potent cocktail of safe-haven demand and rate-cut bets. However, by Wednesday morning, prices had eased to $2,129.26 as investors trimmed positions before Powell’s two-day grilling on Capitol Hill.
Gold’s stellar run this week has been fueled by Wall Street’s woes, with stocks slumping from all-time highs as markets brace for potential rate hike surprises. While the Fed is widely expected to maintain its hawkish stance, any dovish pivot from Powell could turbocharge bullion’s rally as rate cut odds firm.
Read More News:
Bitcoin bounces back after all-time high, eyes record territory again
However, multiple policymakers have recently warned markets against premature easing bets, with stubbornly high inflation seen forcing the U.S. central bank’s hand. This mixed messaging has capped gold’s upside over the past year.
As such, all eyes are on Powell’s testimony for clarity on the rate hike trajectory, with any hawkish rhetoric threatening to put a lid on gold’s surging momentum. Beyond the Fed showdown, this week’s nonfarm payrolls data for February will also be closely scrutinised for labor market cues.