Bulls managed to push gold all the way up to $2,942 an ounce yesterday before ceding ground ahead of Jerome Powell’s first round of comments on Capitol Hill. The Federal Reserve Chair faced the Senate Banking Committee on Tuesday, taking the opportunity to reiterate that there was no rush to lower interest rates on the Dollar. Powell stated that the US economy is strong overall with a solid labour market, but inflation remains above the Fed’s 2% target. Many investors would love to see some extra liquidity pumped into the system, but given the current strength of the US economy the Fed simply has no reason do so. Powell will no doubt repeat much of the same in front of the House Financial Services Committee later today. A reminder that the next interest rate decision is still five weeks away and markets are currently pricing in no change with a 96% probability.
The economic calendar has very little to offer until much later in the day, at which point US inflation data will shake things up a little. Attentions may also shift to oil markets this evening as we get the latest on crude inventories. Brent crude and WTI both saw decent buying pressure early in the week based on supply fears but the latest reports suggest US stockpiles have in fact risen. American Petroleum is now reporting an increase of over nine million barrels last week. Brent Crude now hovering in the mid-$76 range and WTI just under $73 a barrel.
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