During Powell's speech, investors sold off the U.S. dollar and risky assets, expecting - according to the Fed chief's comments - further damage that the Fed's restrictive policies are likely to 'do' to the economy. The dollar was further weakened by the diminishing 'room for growth' of the Federal Reserve's restrictive policy, which needs to be more cautious without wanting to overdo the restrictiveness of current policy. Powell stressed that the labor market will be key to further Fed observations. This means that the Federal Reserve would like to see an increase in unemployment, a decline in wages or less demand for workers - raising fears of a recession. In addition, gold was also supported by Republican-confirmed media reports of a pause in debt limit negotiations.
Gold reacted with a large demand candle, the dollar index (USDIDX) weakened at the same time once again confirming the inverse correlation with gold (GOLD). The BITCOIN, which has shown a correlation with safe haven assets during the banking crisis, has not seen a positive reaction along with gold so far.

The US dollar (yellow line, USDIDX) is losing while gold (GOLD) is strengthening. Source: xStation5

GOLD chart (H4 interval). Gold is trading near resistance, at $1975 per ounce - marked by the 38.2 Fibonacci retracement. A breakout above may herald a rise to the area of $2,000 - psychological level where we can see major resistance zone - SMA200 (red line). Source: xStation5
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