Powell announced what they will do to tackle inflation

An Unforgettable Event Elevating Trading Education 

Jerome Powell, Chairman of the Federal Reserve of the United States, announced that the institution could keep interest rates elevated for a longer period due to the “lack of significant progress” in reducing inflation levels to the annual 2% target.

“Recent data has not provided us with greater confidence and, instead, indicates that more time than expected may be required to achieve that confidence,” he said during a forum in Washington, possibly his last public appearance before the Fed’s next monetary policy meeting.

Powell noted during his presentation that “at this moment, considering the strength of the labor market and the progress in inflation so far, it is appropriate to give more time to the restrictive policy to take effect and allow evolving data and outlooks to guide the members of the institution.”

It is anticipated that at the next monetary policy meeting, scheduled from April 30 to May 1, authorities will maintain rates unchanged. Investors await information on when a reduction in borrowing costs will be implemented, although Powell’s statements suggest this will not happen soon.

“If inflation persists at elevated levels, we can maintain the current level of restraint for as long as necessary. At the same time, we have significant room to ease if the labor market unexpectedly weakens,” added the head of the U.S. central bank.

In this context, the price of gold will continue to rise, despite Jerome Powell’s observations about the solid performance of the U.S. economy and the lack of additional progress on inflation.

Technical Analysis of Gold

Gold exhibits a bullish bias, although the upward trend appears to be overextended, increasing the risk of a correction. However, according to the Dow Theory, it is more likely that the trend will continue rather than reverse. In this regard, following Friday’s decline, the relative strength index (RSI) is again pointing upwards, suggesting buyer participation, and opening the possibility of challenging the $2,400 mark. If this level is surpassed, the next target would be the historical high of $2,431, followed by $2,450.

On the other hand, a daily close below the April 12 close of $2,343 could pave the way for a decline towards $2,300. Once this level is breached, the next support would be the April 5 low at $2,267.