Bulls in the gold market hold sway close to the record high, looking to US data for further momentum

Gold prices (XAU/USD) have continued their upward trend for the third consecutive day, reaching a new all-time high of approximately $2,685-2,686 during the early European session on Thursday. This rally is primarily driven by anticipated interest rate cuts from major central banks and escalating geopolitical tensions resulting from ongoing conflicts in the Middle East, which are prompting investors to flock to the non-yielding yellow metal.

Additionally, market expectations suggest that the Federal Reserve (Fed) may implement modest interest rate reductions, keeping the yield on the benchmark 10-year US government bond above 4%. This situation has bolstered the US Dollar (USD), which is now at its highest level since early August, creating some resistance for gold bulls looking to increase their positions. Traders are now awaiting US macroeconomic data releases for short-term trading opportunities.

Technical Outlook: Gold prices could continue their ascent if the $2,700 mark is surpassed. From a technical standpoint, this ongoing bullish momentum could push prices to $2,700, with additional buying likely serving as a fresh catalyst for bullish traders and facilitating an extension of the multi-month uptrend. This positive outlook is supported by oscillators on the daily chart, which remain in positive territory and have not yet reached overbought levels.

Conversely, the horizontal support zone around $2,662-2,660 appears to be immediate support, followed by the $2,647-2,646 area. A decisive break below this latter level could trigger technical selling, potentially dragging gold prices down to the intermediate support level of $2,630, approaching the $2,600 mark.

 

 

 

 

 

 

Paraphrasing text from "FX Street" all rights reserved by the original author.