XAU/USD jumps above $1800 to test weekly highs after Powell

Metals rose sharply after Powell’s speech amid a decline of the US dollar and risk appetite.
XAU/USD is testing the weekly top near $1810/oz.

Gold prices rose more than $20 from the daily low, rising back to the weekly top at $1809. The positive tone remains intact t despite the sharp rally that took place during the last hour.

The trigger of the rally was the speech from Fed’s Chair Powell that sent the dollar to the downside. He mentioned the Fed could start scaling back its purchase program this year, offering no specific timeline. He sees the surge in inflation fading over time.

The DXY fell to 92.66, the lowest in more than a week. Equity prices reacted to the upside. The Dow Jones is rising by 0.69% and the Nasdaq by 1.0%. US yields dropped, with the 10-year falling to 1.31%.

XAU/USD is testing the weekly top around $1,809, and a break higher would put prices at the strongest level in three weeks. The next resistance might be seen at around $1,816, and then comes the July high of $1,834. The area around $1,800 and $1,795 is again the support to watch in the short-term.