Gold is struggling to move past key resistance despite Powell’s dovish tone

• The American dollar – gold’s biggest nemesis – is no the defensive, courtesy of Powell’s dovish comments.
• Still, gold is struggling to beat the resistance if the trendline connecting the Oct. 26 and Nov. 7 highs.

Gold is currently trading at $1,222, having clocked a high of $1,227 in the overnight trade.

Fed Chair Powell, at 17:00 GMT yesterday, said the interest rates are “just below” the level where they won’t stimulate the economy (neutral level), squashing bets of an extended policy tightening period.

As a result, the US dollar exchange rate, as represented by the dollar index, fell almost 100 pips to 96.69. The losses in the greenback put a bid under the zero-yielding yellow metal.

So far, however, the metal has not been able to beat the falling trendline resistance, currently at $1,222. A daily close above that level would signal a continuation of the rally from the Nov. 13 low of $1,196.

The prospects of a bullish break above the trendline hurdle look strong, as the dollar index created a bearish outside-day candle yesterday, implying a bullish-to-bearish trend change.

Gold Technical Levels