Gold soars to $1226 as US dollar drops sharply

• The yellow metal rose $10 in a few minutes boosted by a decline of the US dollar.
• Federal Reserve Chairman Powell mentioned the policy rate is just below neutral. 

Gold prices jumped following the release of Fed’s Chairman Powell that pushed the greenback sharply to the downside. The metal was moving in a small range between $1211 and $1215 and broke dramatically to the upside. 

Price peaked at $1226.50, a 2-day high. The $10 rally pushed the price back above the 20-day moving average and also back into the trading range of the previous days. It fully recovered from yesterday’s sharp slide and now it appears to be on course to test last week highs and the $1240 area. 

Fed’s Powell said the policy rate “remain just below the broad range of estimates of the level that would be neutral for the economy”, and triggered a rally in equity prices and a slide of the US dollar. The Dow Jones is up by almost 2% while the DXY is retreating from the highest level in two weeks around 97.50, back under 97.00. 

XAUD/USD Short-term levels to watch 

To the downside, support levels might be located at $1,218 (20-day moving average) followed by $1,215 and $1,208. On the upside, resistance could be seen at $1,225, followed by $1,235 and $1,241.