Hello traders,
Tuesday, Hawkish Signals in Powell's Remarks
Despite the neutral tone, Powell's remarks revealed several hawkish signals:
1. Rising Neutral Rate
Powell acknowledged that the neutral rate has "likely moved up significantly" post-pandemic. This has key implications:
Neutral Rate: The theoretical rate that sustains full employment and stable inflation without stimulating or restricting growth.
Impact Chain: Neutral rate ↑ → Fed funds rate ↑ → Real rates ↑ → 10-year Treasury yield ↑ → Dollar funding costs ↑.
2. Dashed Rate Cut Hopes
Powell reiterated that the Fed is in no rush to cut rates before the next election or impeachment. This contradicts market expectations of rate cuts in March or June.
3. Higher Bar for QE
Powell stated that QE would only restart if rates return to 0%. This suggests the Fed will continue QT through 2025, even if bank reserves shrink.
Impact on Gold: Real Rates Pressure
Rising real interest rates increase the opportunity cost of holding non-yielding assets like gold, creating downward pressure on prices.
Dollar Strength
A stronger dollar (due to higher funding costs) typically weighs on gold, as it becomes more expensive for foreign buyers.
Technically, in the 4H CHART,
Price Structure as:
Current Price: 2,894.025 (-0.12%);
Critical Extreme Fibonacci Extensions: 2.27(2,939) as the new high for gold could be the end of the 5th main upward wave;
The target for the corrective wave Level could be : 2783 where be retest and broken through.
In the daily chart, GOLD has made a single bearish signal on the top, this is no good for traders who want to open buy at current position.
GOOD LUCK!
LESS IS MORE!
Tuesday, Hawkish Signals in Powell's Remarks
Despite the neutral tone, Powell's remarks revealed several hawkish signals:
1. Rising Neutral Rate
Powell acknowledged that the neutral rate has "likely moved up significantly" post-pandemic. This has key implications:
Neutral Rate: The theoretical rate that sustains full employment and stable inflation without stimulating or restricting growth.
Impact Chain: Neutral rate ↑ → Fed funds rate ↑ → Real rates ↑ → 10-year Treasury yield ↑ → Dollar funding costs ↑.
2. Dashed Rate Cut Hopes
Powell reiterated that the Fed is in no rush to cut rates before the next election or impeachment. This contradicts market expectations of rate cuts in March or June.
3. Higher Bar for QE
Powell stated that QE would only restart if rates return to 0%. This suggests the Fed will continue QT through 2025, even if bank reserves shrink.
Impact on Gold: Real Rates Pressure
Rising real interest rates increase the opportunity cost of holding non-yielding assets like gold, creating downward pressure on prices.
Dollar Strength
A stronger dollar (due to higher funding costs) typically weighs on gold, as it becomes more expensive for foreign buyers.
Technically, in the 4H CHART,
Price Structure as:
Current Price: 2,894.025 (-0.12%);
Critical Extreme Fibonacci Extensions: 2.27(2,939) as the new high for gold could be the end of the 5th main upward wave;
The target for the corrective wave Level could be : 2783 where be retest and broken through.
In the daily chart, GOLD has made a single bearish signal on the top, this is no good for traders who want to open buy at current position.
GOOD LUCK!
LESS IS MORE!
Note
In January, the U.S. unadjusted CPI rose 3% year-on-year, expected to rise 2.9%, and the previous value was also 2.9%; the seasonally adjusted CPI rose 0.5% month-on-month, expected to rise 0.3%, and the previous value was 0.4%; the unadjusted core CPI rose 3.3% year-on-year, expected to rise 3.1%, and the previous value was 3.2%; the seasonally adjusted core CPI rose 0.4% month-on-month, expected to rise 0.3%, and the previous value was 0.2%.This CPI data is really quite poor, and the speed of inflation increase is clearly beyond expectations.
Therefore, at 9:30 PM before the opening of the U.S. market on Wednesday, after the CPI data was released, we witnessed gold ending its decline during the early Asian session on Wednesday.
There is always a saying in trading plans: I wonder if you have noticed that for new positions, after the data is released and the U.S. market opens, one should look for a one-hour short entry signal and enter the market at the right time. This premise means that the data supports the current trend, and after some fluctuations, it continues to return to a downward trend.
Clearly, Wednesday's CPI does not belong to this situation. Therefore, the short entry failed, and the detailed content will be analyzed in Thursday's logical analysis and opportunity analysis.
Note
Note
Chance for gold to pull down for a correction?Trump announced today that the new tariffs will not take effect today. They will be delayed by a few months, possibly taking effect on April 1st. This remains to be determined. Today this will be a presidential memorandum, not an executive order, and the U.S. Trade Representative will be responsible for determining the next steps.
Trump suddenly terminated the suspension and announced "reciprocal tariffs".
Note
Check sideways price action inside a potential triangle and looking for a correction begin from the top .
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
10 year 4H swing trader! Join group for free； Contact wechat: ziyuvera; ABC Swing trading strategy Course Consul wechat: ziyuvera
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.