Gold slides to $2,900 with Bullion getting afraid of Fed Powell's testimony

LONDON (February 11) Gold’s price (XAU/USD) is in a wild ride this Tuesday and is dipping lower after first having hit a new record high at $2,942 in early Tuesday trading. Meanwhile, United States (US) President Donald Trump has imposed 25% tariffs on steel and aluminum imports for all countries as of March 12,, while China has quietly imposed retaliatory tariffs on some US goods. China is only showing its teeth by now and has not gone full blazing, while US President Trump is nowhere near his promised 60% levies on all Chinese products as announced earlier in his campaign, Bloomberg reports. 

Meanwhile, traders will focus on Federal Reserve (Fed) Chair Jerome Powell’s semiannual testimony to lawmakers on Tuesday and Wednesday for fresh clues about the path the US monetary policy will take. Powell is likely to highlight the resilient economy as a key reason central bankers are in no rush to cut borrowing costs further. This is a big risk for Gold this Tuesday, as it could be a bearish element for bullion.

• At 15:00 GMT, Fed Chairman Jerome Powell testifies before the US Senate Banking Committee 
• US President Donald Trump said on Monday that the latest round of levies, which go into effect in March, would bolster domestic production and bring more jobs to the US. He also warned the tariffs “may go higher”, Bloomberg reports.
• The CME FedWatch tool shows a 93.5% chance that interest rates will remain unchanged in March, compared to a slim 6.5% chance of a 25 basis point (bps) interest rate cut. 
• Billionaire Elon Musk on Sunday signaled that the Fed could face scrutiny as the Department of Government Efficiency (DOGE) continues to audit federal agencies. Musk wrote on X in response to a user's post about the billionaire's support for an audit of the Fed that the central bank isn't above scrutiny from DOGE, Reuters reports. 

FXStreet