Gold prices surged to a new all-time high around $2,476-$2,477 during the Asian session on Wednesday. The upward momentum is driven by expectations of a September rate cut by the Federal Reserve. Recent comments from Fed officials have solidified these expectations, keeping US Treasury bond yields low and benefiting the non-yielding precious metal.
Despite a slight rise in the US Dollar, gold remains attractive to investors. The ongoing risk-on sentiment in global equity markets hasn't dampened demand for the safe-haven asset. However, overbought conditions might limit further gains.
Key Market Influences:
- Fed officials' comments reinforce the likelihood of a September rate cut, boosting gold.
- Fed Chair Jerome Powell noted significant progress in achieving the inflation target.
- US Retail Sales data supported the USD, indicating consumer resilience and economic growth.
- Traders are pricing in multiple rate cuts by year-end, affecting US Treasury yields.
Technical Analysis:
- Gold's breakout above $2,425-$2,430 and surpassing $2,450 could drive further bullish sentiment.
- Oscillators indicate overbought conditions, suggesting resistance near the $2,500 mark.
- A drop below $2,450 might find support around $2,430-$2,425, with further declines possibly targeting $2,400 and $2,360.
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