Gold price (XAU/USD) attracts some buyers for the sixth straight day on Tuesday and remains well within the striking distance of the all-time peak, around the $2,265-$2,266 area touched the previous day. The upbeat US manufacturing data released on Monday raised doubts over whether the Federal Reserve (Fed) will cut interest rates three times this year. This, along with the risk of a further escalation of geopolitical tensions in the Middle East, tempers investors’ appetite for riskier assets and acts as a tailwind for the safe-haven precious metal.
Meanwhile, the markets are now pricing in a total of 69 basis points (bps) rate cut for 2024, lower than the Fed’s projected 75 bps. This remains supportive of elevated US Treasury bond yields and lifts the US Dollar (USD) to its highest level since February 14, which, in turn, might cap gains for the non-yielding Gold price. Bulls might also prefer to wait for some near-term consolidation amid overstretched conditions on the daily chart, ahead of the US macro data and speeches by influential FOMC members later during the North American session.
Technical Analysis: Gold price stands tall near all-time peak, overbought RSI warrants caution for bulls
From a technical perspective, the Relative Strength Index (RSI) on the daily chart is flashing overbought conditions, which makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up. That said, any meaningful corrective decline is more likely to find decent support and attract fresh buyers near the $2,223 region, or the previous record high. This should help limit the downside near the $2,200 mark, which should now act as a key pivotal point for the Gold price. A convincing break below the latter might prompt some technical selling and pave the way for deeper losses.On the flip side, the $2,265-2,266 region, or a fresh record peak touched on Monday, now seems to act as an immediate hurdle for the Gold price. A sustained strength beyond should allow the XAU/USD to prolong its appreciating move further towards conquering the $2,300 round-figure mark.
