Gold trims losses as dollar weakens

Trump’s “high on rhetoric, low on substance” speech weakened the US dollar, thus helping gold recover from the session low of $1242 to $1246 levels.

Lack of policy specific

The speech was the most optimistic one from Trump, but lacked policy specifics. The president promised ‘big, big cut’ in taxes and revealed 1 trillion dollar infrastructure plan that would be funded by public and private money.

Nothing that we heard today is a surprise to the markets, thus the dollar index fell to a 50-DMA level of 101.23. The metal was last seen trading around $1235 levels.

The gains are being capped by the hawkish comments from the Fed officials and the resulting rise in the short duration and long duration treasury yields.

Gold Technical Levels

A breakdown of support at $1240.88 (61.8% Fib expansion) could yield a sell-off to $1234.60 (Feb 14 high) and $1229.40 (50% Fib expansion). On the higher side, breach of $1249.31 (session high) could see prices revisit $1257.23 (78.6% Fib expansion) and $1263.87 (Feb 27 high).