• Gold on the backfoot on Wednesday after a wild ride the previous day. 
• Traders are mulling Fed Chairman Powell’s speech after a testimony with little to no fresh clues. 
• The $3,000 level is out of the cards this week as a technical barrier must first be overcome. 

Gold’s price (XAU/USD) undergoes a correction and trades below $2,900 at the time of writing on Wednesday after Federal Reserve (Fed) Chairman Jerome Powell went to Capitol Hill for his semi-annual testimony before lawmakers the previous day. Powell did not say much but stated that the current level of the monetary policy rate is helping the central bank to withstand market volatility and potential inflation shocks that could take place. The comments were enough to fuel a small surge in US bond yields. 

Meanwhile, traders see their beloved Fed under pressure from the Department of Government Efficiency (DOGE), led by Elon Musk, who already mentioned at the beginning of the week that the Fed will face scrutiny from DOGE, as it will from all other government agencies. DOGE has already tried accessing all US Treasury Data, though access to the US Treasury system remains blocked for now. 
 

Daily digest market movers: Powell ready for his second day

• At 15:00 GMT, Fed Chairman Jerome Powell testifies on his second day in Congress before the US House Financial Services Committee.
• At 17:00 GMT, Federal Reserve Bank of Atlanta President Raphael W. Bostic gives remarks at the Atlanta chapter of the National Association of Corporate Directors.
• At 22:05 GMT, Federal Reserve Governor Christopher Waller is set to speak at "A very Stable Conference: Stablecoin Infrastructure for Real World Applications" in San Francisco, California.
• Australia’s second-largest Gold miner, Evolution Mining Ltd.,  expects prices to rise further in the near term after the company posted record first-half profits following bullion’s rally to near $3,000 an ounce, Bloomberg reports. 
• The CME FedWatch tool shows a 95.5% chance that interest rates will remain unchanged in March, compared to a slim 4.5% chance of a 25 basis point (bps) interest rate cut. 
   

Technical Analysis: More downside

With Fed Chairman Powell's testimony, Gold might have shot itself in the foot after its volatile session on Tuesday. With the price action now below the daily Pivot Point (at $2,907), Bullion is not facing just the Pivot Point’s resistance levels, it also needs to break through a Pivot Point level. In theory, an opening below the daily pivot is always seen as bearish and is often a sign more downside is to come in the same trading day. 

The first support level on Wednesday is $2,872, which is the S1 support. From there, S2 support should come in at $2,846. In case of a sharp correction, the bigger $2,790 level (October 31, 2024, high) should be able to catch any falling knives.

On the upside, the daily Pivot Point at $2,907 is the first big level that needs to be recovered. From there, the R1 resistance comes in at $2,933. In case the rally continues, the $2,950 big figure psychological level and the R2 resistance at $2,968 will be tested for a break to the upside. Further up, the $3,000 psychological level could be next.

(Click on image to enlarge)

XAU/USD: Daily Chart

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