- Gold is lacking a clear direction in Asia.
- The metal created a doji candle on Monday.
- Fed’s Powell warned on corporate debt, but failed to move the needle on Gold.
Gold is seeing little action in Asia, having formed a doji candle on Monday – a sign of indecision in the market place.
The yellow metal is currently flatlined at $1,276 despite cautious comments from Federal Reserve President Jerome Powell.
Financial regulators must take seriously potential dangers that rising levels of business debt pose to the US economy, Powell said on Monday, while adding that some comparisons to last decade’s subprime mortgage bubble overstate the risks.
Powell also said that it is premature to make a judgement on trade and tariffs impact on the monetary policy path.
So far, Powell’s take on corporate debt has failed to put a bid under gold. The risk-off tone in the US stocks also did little to help boost haven demand for the yellow metal. The S&P 500 index fell 0.6% as Huawei ban triggered a sell-off in chip stocks.
Looking forward, the metal may remain on the defense. After all, the metal’s inability to post gains on Powell’s comments and risk-off tone in stocks indicates the sentiment is quite bearish.
That being said, the case for corrective move higher would strengthen if the price finds acceptance above $1,279 – the high of the doji candle created on Monday. That could happen if the US dollar – gold’s biggest nemesis – takes a beating. As of writing, the Dollar Index is reporting mild gains at 98.00.
Pivot points
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