Chairman Powell Reports to Congress and Senate
Twice each year the chairman of the Federal Reserve meets with the Congress, as well as the Senate. During these two meetings he delivers his outlook on the economy along with some insights as to the upcoming monetary policy. This year will be particularly interesting in that the Fed made such a large pivot last year moving from a monetary policy of tightening, to that of accommodation through rate cuts and added liquidity.
Currently the Federal Reserve plans on leaving interest rates where they are without any rate hikes or cuts. However according to market analysts there is an 84% probability that the Federal Reserve might in fact raise rates one time this year.
Jerome Powell stated that the Fed was able to maintain a steady monetary policy over the past 12 weeks because some uncertainty surrounding trade had diminished recently and there were signs that the global growth “May be stabilizing”.
He emphasized the fact that the current accommodative monetary policy stance is “Appropriate to support growth and push inflation up to the central banks 2% target.”
In his speech today Chairman Powell underscored that there are risks to the United States economy which remain as a direct result of the current coronavirus outbreak. He also underscored the fact that some of the factors that limited economic growth last year have eased, he cautioned “risks to the outlook remain, particularly from the coronavirus.”
“We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,”
The chairman also made mention of China’s corporate and financial sectors that in his opinion are currently very fragile which could be vulnerable to an adverse shock.
Many analysts have cited a statement made today by the director general of the World Health Organization, Tedros Adhanom Ghebreyesus, the “coronavirus is a grave threat for the rest of the world” this in confluence in that some signs the rate of infection may be slowing.
However, the World Health Organization reported today that now there is more than 43,000 cases of the Wuhan virus (coronavirus), with the death toll continuing to rise to 1008. These numbers are different than the numbers given by Chinese National Health Commission which stated that the number of new, confirmed cases in China fell.
However, it was the sentiment that there is truly a slowing down of the coronavirus outbreak that put pressure on gold pricing today. As of 5:11 PM EST gold futures are currently trading down $8.30, which is over ½ a percent decline and fixed at $1571.20.
Our current studies indicate that there could still be more room on the downside for gold to go to. The studies indicate minor support at $1560 to $1549.90. Major support occurs at $1529. Currently resistance is at $1583. This is based upon our former support trendline now flipping to be a trendline indicating resistance.
Wishing you as always, good trading,
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Gold Forecast: Proper Action
We are currently flat with no active trades in gold or silver. However on today’s show we continue to look at short term elliot wave studies to confirm or negate whether or not gold has hit support. As of now, it has not.
Gold Market Forecast
Currently our daily candlestick chart still indicates that we have completed the 4th wave now that it appears that gold has completed an ABC correction. Now in wave 5 we have entered a very minor correction.