<p style=““ class=“text-align-justify“>Gold enjoyed a stellar start to the new year as it capitalised on its usual January seasonal tailwind, before things went awry in February in a $150 drop from the highs at the start of the month. When Fed chair Powell delivered more hawkish remarks last week it took price back near its 100-day moving average (red line) but amid the whole SVB situation, gold bugs are finding renewed vigour in a push towards $1,900 now.</p><p style=““ class=“text-align-justify“>We are currently seeing price trade at its highest levels in over five weeks, with buyers looking to try and breach the 9 February high of $1,890.</p><p style=““ class=“text-align-justify“>This comes as the dollar remains on the softer side today, as markets are paring back Fed rate hike odds. The March decision is essentially <a target=“_blank“ href=“https://www.forexlive.com/news/fed-rate-hike-odds-have-turned-to-become-a-coin-flip-now-20230313/“ target=“_blank“ rel=“follow“>a coin flip</a> now and that’s music to the ears of gold buyers. Adding to that is the sharp drop in bond yields and gold has rallied by over 4% in the past three trading sessions.</p><p style=““ class=“text-align-justify“>The major headwind for gold is that central banks will have to keep tightening amid high inflation. However, if policymakers have already started to break certain parts of the economy, then perhaps we could see a policy pivot come into play sooner and that will be a really massive tailwind for the yellow metal in the year(s) to come.</p>
This article was written by Justin Low at www.forexlive.com.
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