XAU/USD is on a consolidation mood today after rallying by 1.30 Percent on Wednesday as the markets warmed up to the eagerly anticipated speech at the Jackson Hole Symposium on Thursday by the Federal Reserve Chairman Jerome Powell.
The dovish expectations from the speech pushed down the US Treasury yields and the dollar. Market participants are sensing that Powell will hint at a new policy framework in its current fight with low inflation.
The fears of resurgent coronavirus in a second wave and the renewed tensions over the South China Sea between the US and China could support gold’s haven appeal.
The US Q2 Preliminary GDP release will be watched for cues ahead of Powell’s speech.
On the technical side, the resistance level $1952 found near Wednesday’s high will keep the bulls in check. At the same time, the downside is contained by the support band between $1,940-35, which aligns with other technical reading to add more weight to that zone.
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