The Gold Price is Expected to Reach $1,880 as Investors Digest Powell's Guidance and Biden's State of the Union Address

EnclaveFX Ltd
Feb 08, 2023

After dropping to nearly $1870.00 in the Asian session on December 2nd, the gold price (XAU/USD) is expected to gain ground in the Asian session as the risk appetite of traders is improving. The gold price is expected to gain ground in the Asian session as the risk appetite of traders improves.

As investors digested the hawkish statement that Federal Reserve chair Jerome Powell made on interest rates at the State of the Union address and the remarks of US President Joe Biden during the State of the Union address, they decided to adjust their portfolios accordingly.

It has been made clear by Jerome Powell that the central bank will continue to raise interest rates if the labor market report continues to surprise the market on the upside. Because the Fed is committed to raising inflation to 2%, higher interest rates will remain in place for an extended period of time.

At the same time, US President Joe Biden also made a strong statement about China, noting that the United States is in a stronger position than it has been in decades in order to compete with anyone and anyone else.

Despite Powell's hawkish commentary on the S&P500 and Biden's harsh statements on China, risk-perceived assets like S&P500 futures have recovered losses. The US Dollar Index (DXY) is struggling to hold on and is expected to resume its downward trend. They have recovered losses displayed in the Asian session, revealing a risk-on-market mood. In addition, the 10-year US Treasury yields have slipped to near 3.65% over the past few months.


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