Gold to Exhibit Bearish Correction – Pivot Point to Support at 1,807

During Monday’s Asian trading hours, the yellow metal price seesawed around $1,817.74 after stepping back from a 2-week high. GOLD prices consolidate after Friday’s heavy rise, following Fed Chair Powell’s Jackson Hole speech. The speech by US Federal Reserve Chairman Jerome Powell put pressure on Treasury yields and the dollar, which might push gold prices to a multi-day high level.

The US Dollar Index (DXY) refreshed a two-week low and was seen as one of the critical factors that helped gold prices to stay bid. On the other hand, the mixed market sentiment due to the coronavirus and geopolitical headlines also boosted the safe haven’s prices. Moving on, traders seem cautious about placing any strong positions ahead of the crucial US Nonfarm Payrolls (NFP), up for publication on Friday.

Meanwhile, the mild upticks in the market trading sentiment were seen as one of the key factors that kept the lid on any additional gains in gold prices. At this time, the yellow metal price is trading at 1,815.00 and consolidating in the range between 1,813.42-1,823.28.

US stock futures benefitted from Federal Reserve Chairman Jerome Powell’s measured response to tapering. However, the ever-increasing coronavirus and geopolitical tensions between the US and China and the Taliban versus the West keep challenging the market trading sentiment. Fed Chair Powell supported global risk appetite on Friday, despite signaling a taper this year, as the central banker refrained from giving any exact timing of the taper and indicated a gap between the taper and the rate hike. Furthermore, comments like, “We will be carefully assessing incoming data and the evolving risks”, offered extra support to the market’s trading sentiment.

This was witnessed after the S&P 500 Futures marked 0.05% intraday gains to 4,5008. Thus, the mild gains in the market trading sentiment tend to undermine safe-haven gold prices. As a result, the yellow metal price seesawed around $1,817.74 after stepping back from a 2-week high.

Despite the upbeat market trading sentiment, the US Dollar Index (DXY) refreshed a two-week low in the wake of Federal Reserve Chair Jerome Powell laying out a slower-than-expected path to rate hikes. However, the traders’ focus shifted to US jobs figures due on Friday for clues on a tapering timeline. Speaking at a symposium in Jackson Hole, Wyoming, last Friday, U.S. Federal Reserve Chairman Jerome Powell did not indicate when the Fed would start tapering down its support for the economy and repeated the stance that the current spike in inflation is temporary.

He suggested that the central bank could start tapering off from the massive levels of support for the economy by the end of the year, a bit slower than many had expected, but did not suggest a rush to raise interest rates. Thus, these dovish stances put bearish pressure on the US dollar. Therefore, the declines in the US dollar held the bullion prices bid as…