Powell Event Causes Turmoil in Gold Market
Recently, financial markets have been stirred by events surrounding Powell, with the gold market particularly affected, drawing significant attention to its price movements.
From a news perspective, the focus has been on the risk of Powell's potential departure. While most market participants believe the probability of Powell leaving before his term ends is low, it cannot be ignored that Trump has been persistently pressuring the Federal Reserve on interest rate cuts. Moreover, Trump has repeatedly questioned Powell's decision-making in public, even mentioning the possibility of firing him. Such political maneuvering undoubtedly introduces uncertainty into the market. As the core policymaking body for U.S. monetary policy, the stability of the Federal Reserve's policies is crucial for the smooth functioning of financial markets. Once concerns arise about the stability of the Fed's policies, capital tends to flow into safe-haven assets. Gold, as a traditional hedge and store of value, naturally becomes a choice for many investors, providing potential support for gold prices.
In terms of gold price movements, the Powell event has led to increased volatility. Previously, the gold market was in a relatively stable range-bound trend, with balanced forces between bulls and bears. However, as Trump's pressure on Powell intensified, gold prices exhibited noticeable fluctuations. In the initial stages of the news, market panic sentiment rose, driving gold prices higher as bullish forces dominated, pushing prices above the upper boundary of the previous trading range. Subsequently, however, lingering doubts about whether Powell would ultimately step down and whether Fed policies would materially change led to profit-taking, causing a partial pullback in gold prices.
From a technical analysis perspective, the short-term moving average system has shown complex crossovers under the influence of the Powell event. The 5-day and 10-day moving averages briefly formed a golden cross, signaling short-term bullish momentum. However, as prices retreated, a death cross emerged, indicating fierce battles between bulls and bears in the near term. On the other hand, the 200-day moving average continues to maintain a relatively steady upward trend, suggesting that the long-term bullish trend in gold remains intact.
For investors, caution is advised in such a complex market environment. Short-term speculators should closely monitor the developments of the Powell event and related macroeconomic data, given the current high volatility. If the Powell situation escalates further, reigniting market panic, a tactical long position in gold could be considered—provided stop-loss orders are in place to manage potential risks. Should clear reversal signals emerge, such as prices breaking below key support levels, investors should exit decisively. For long-term investors, given gold's enduring role as a safe-haven asset and the persistent uncertainties in the global economy, allocating a certain proportion of gold holdings may help achieve portfolio diversification and risk mitigation.
Overall, the impact of the Powell event on the gold market continues to unfold. Investors must stay vigilant and formulate appropriate strategies based on their investment objectives, risk tolerance, and other factors to navigate the evolving dynamics of the gold market.
