After three years, gold has updated its all-time high! However, right after this event there was a pullback of the price down. Investors' most positive expectations were met. The rate was raised as predicted. According to Powell, this may be the last tightening. These words of the regulator stimulated the growth of gold prices.
Chairman of the Federal Reserve System (Fed) in the United States Jerome Powell announced a potential pause in the tightening of the monetary policy in the country.
The Fed's future decisions will be based on a combination of economic data and credit conditions, Powell said. Attention will be focused on the activities of small and medium-sized banks and the credit availability.
Such comments pushed up precious metals, especially gold and silver.
Regarding a possible decrease in interest rates, the Fed chairman claimed that the policy change would not be reasonable because inflation is falling not quickly enough.
Nevertheless, despite this positive for the yellow metal, it may be corrected from current levels. The head of the Fed commented on the situation with the U.S. government debt. He explained his view that raising the national debt limit is obvious and the only right thing to do. In recent days, gold was rising, including the rise in tensions over this topic. Most probably in the end of May or in the beginning of June the situation will be resolved, and this uncertainty will disappear.
Traders are predicting a rate cut in August of this year, but the Fed did not give such a signal. The regulator noted the strength of inflation and the labor market, so any confirmation of these words could correct gold prices.
According to the technical analysis, gold renewed its all-time highs and went straight into a correction. This is not a good signal for quotes. In fact, it can be said that the upper limit of the large rectangle was tested.
A pullback in the price may occur now. The first downside target will be the round level of $2,000. On the chart, it can be seen how often the price has reached this level. Stop-loss can be set at another update of the historic high near $2080.
Decrease in the price of gold:
Take profit – 2000
Stop-loss – 2080