Gold plunges to three-week lows on Fed Powell's optimism

Fed's Powell testimony lift hopes for a fourth rate hike this year.

Spot gold challenging a three-week low.

Fed head Powell's testimony is giving the greenback a nice boost against all of its major rivals, with gold breaking below $1,320.00 a troy ounce, currently at 1,316.80, challenging a three-week low and pressuring the 38.2% retracement of its December/January rally.

The American dollar run after Powell opened doors for more than three rate hikes this year. Fed's head Powell is making its first public appearance as leader of the Central Bank, testifying on the Semiannual Monetary Policy Report before the House Financial Services Committee. So far he is handling it pretty well, being elusive on details about the future of monetary policy, but reaffirming that the Fed is heading into normalization, backed by continued solid growth, and despite slow inflation, also opening doors for more than 3 rate hikes this year, as he said that the outlook has improved since last December.

Spot gold monthly low was set at 1,306.99, the immediate support ahead of the 50% retracement of the mentioned rally at 1,300.98. Resistances from here come at 1,320.89, followed by the 1,327.00 region and ahead of 1,335.35, the next Fibonacci resistance.