Gold price (XAU/USD) retreats from a fresh record high touched earlier this Thursday, albeit manages to hold its neck above the $2,200 mark heading into the European session.
From a technical perspective, the overnight strong positive move confirmed a breakout through a bullish flag chart pattern and validated the positive outlook for the Gold price. That said, the Relative Strength Index (RSI) has moved back above the 70 mark, making it prudent to wait for some near-term consolidation or a modest pullback before traders start positioning for any further appreciating move. Nevertheless, the broader setup supports prospects for an extension of the recent well-established strong uptrend witnessed over the past month or so.
Meanwhile, any meaningful corrective decline below the $2,200-2,190 region is likely to attract fresh buyers and remain limited near the $2,160-2,158 horizontal zone. This is followed by the weekly swing low, around the $2,146 area, which, if broken decisively, might prompt some technical selling and drag the Gold price further towards the next relevant support near the $2,128-2,127 zone. The XAU/USD could decline further, eventually dropping to the $2,100 round figure.
Gold price (XAU/USD) retreats from a fresh record high touched earlier this Thursday, albeit manages to hold its neck above the $2,200 mark heading into the European session. The Federal Reserve (Fed) on Wednesday projected a 75 basis point rate cut by end-2024, keeping the US Dollar (USD) depressed near a one-week trough and pushing the non-yielding yellow metal higher for the second straight day. That said, elevated US Treasury bond yields help limit the downside for the Greenback.
Apart from this, the prevalent risk-on environment – as depicted by an extension of the recent bullish run across the global equity markets – caps the upside for the safe-haven Gold price amid slightly overbought conditions on the daily chart. Nevertheless, the fundamental backdrop suggests that the path of least resistance for the XAU/USD remains to the upside, warranting some caution before positioning for any meaningful corrective fall in the near term. Traders now look to the release of flash PMIs for cues about the global economic health, which, in turn, might provide some impetus to the precious metal.