Gold sees weekly gains evaporate on Fed-infused decline

LONDON (February 12) Gold’s price (XAU/USD) is facing some profit-taking pressure and trades below $2,900 throughout this Wednesday after Federal Reserve (Fed) Chairman Jerome Powell went to Capitol Hill for his semi-annual testimony before lawmakers the previous day and before the US Consumer Price Index (CPI) data for January release. 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: Markets brace for more from Powell

• 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. 

FXStreet