Fed Chair Powell Testimony Expectations and XAUUSD Direction Today

Based on previous sentiments, there is a high possibility that Fed will require a confirmation that inflation is slowing before approving interest rate cuts. This will happen irrespective of the data-based evidence on the softer economic growth and employment metrics.

·  Slower Inflation: Recent data suggests inflation is on a downward trend, which is good news for consumers.

·  Interest Rate Cuts: Lowering interest rates can stimulate the economy by making borrowing cheaper. However, it can also reignite inflation if done prematurely.

·  Confirmation Needed: The Fed wants to see sustained evidence of slowing inflation before cutting rates. This ensures it's not a temporary blip and inflation won't surge again.

·  Softer Growth & Employment: While economic growth may be slowing, the job market might still be healthy. This creates a balancing act for the Fed - controlling inflation without hurting employment.

Influence on XAUUSD (Gold Price):

(Sentiment source:myfxbook)

Lower Inflation: Generally, lower inflation reduces the appeal of gold as a hedge against inflation. This could put downward pressure on XAUUSD.

Slower Growth & Interest Rates: Slower growth can increase uncertainty, potentially driving investors towards gold, a traditional safe-haven asset. This could counteract the disinflationary pressure.

Fed Policy Stance: If the Fed maintains its hawkish stance (keeping rates high), it could strengthen the US dollar, putting further downward pressure on XAUUSD.

Predicted XAUUSD Direction 9^th July 2024:

Buy Entry at 2365

Take Profit: Depending on Personal appetite.