The increasing political and economic risks make the take a more cautious approach to which is positive for the precious metal due to lower US Treasury yields and the dollar.
Probably, a more important message from the Fed was that the monetary authorities could end their efforts to reduce the portfolio sooner than expected. The decision on rates and the balance will depend on the incoming economic data, so both the buck and the bullion are going to be more sensitive to signals from the US economy in the month to come.
Further on, the key focus will be on Friday’s US monthly jobs report. Should the wages and employment numbers come in lower than expected, the selling pressure on the USD could send gold prices to fresh highs. On the other hand, after a spectacular rally, there is a risk of some profit taking ahead of the weekend.
I'm probably the only person or maybe 1 in 10,000 who don't see anything he said as being 'dovish'. Powell was playing with words. But I focused on how he used his words. Powell appeared to me to be ducking issues left, right and centre with characteristic stock phrases, that committed to nothing of substance. It was like basically 'everything' was part of some consideration - and we'll 'wait and see'. Furthermore the man appeared nervous, sombre and in a state of over-control on his emotions which seemed to run deep. It was as if he was panicking inside.
I don't blame anybody for riding the wave of joy that resulted from what must be a wishful misinterpretation of Powell. The Fed is in a zugswang and trying to stay calm in order to avoid catastrophic or precipitous economic chaos. They'll probably win that prime objective simply because they know how much people live on hope instead of reality. So - they'll continue to play with words, but reality always catches up.
The US-Dollar has been on the down side mostly for the period in which Gold was rising. Nothing surprising in that. However the degree of rise appeared out of proportion to US-Dollar ducking low. I have no evidence, but it is a known fact the Chinese are buying up gold globally and boosting extraction - pouring billions into the latter. So it is also probable that the massive 5-day pump north had something to do with China (in part). Alternatively, and possibly, sensible investors don't care much for the well chosen words of the Fed and are hedging heavily with gold.