July 17, 2024
New Delhi, India
Gold prices
Gold price (XAU/USD) pulled back from its fresh all-time high of $2,482-$2,483 during the Asian session on Wednesday, now trading near the lower end of its daily range. The risk-on environment and an overbought Relative Strength Index (RSI) prompted some profit-taking. However, expectations of a dovish Federal Reserve (Fed) and anticipated rate cuts in September continue to lend support to gold prices.
Key Highlights:
- Intraday Performance:
- Gold touched a new record peak around $2,482-$2,483.
- Currently trades near the lower end of its daily range.
- Market Sentiment:
- Prevailing risk-on environment prompts profit-taking.
- Slightly overbought RSI on the daily chart contributes to the pullback.
Fundamental Analysis:
- Federal Reserve Expectations:
- Investors anticipate the Fed will start cutting rates in September.
- US Treasury bond yields remain near multi-month lows, pressuring the US Dollar (USD).
- USD Performance:
- USD struggles to recover from a three-month trough.
- Dovish Fed expectations keep the USD bulls on the defensive.
Market Movers:
- Fed Comments:
- Fed Chair Jerome Powell indicated progress on inflation control.
- San Francisco Fed President Mary Daly expressed confidence in reaching the inflation target.
- Fed Governor Adriana Kugler suggested potential easing of monetary policy later this year if economic conditions evolve favorably.
- Treasury Yields:
- Benchmark 10-year US government bond yield and the 2-year Treasury yield hit multi-month lows.
- Traders are pricing in multiple rate cuts by year-end.
- US Retail Sales Data:
- The Census Bureau reported unchanged retail sales in June.
- May’s retail sales were revised higher, showing 0.3% growth.
Short-Term Outlook:
- Technical Indicators:
- RSI indicates potential for further profit-taking.
- Gold’s pullback lacks a significant fundamental catalyst and remains cushioned by dovish Fed expectations.
- Market Sentiment:
- Risk-on sentiment and bullish global equity markets may limit fresh bullish bets on gold.
- The US Industrial Production figures will provide short-term trading impetus.
Bottom Line:
Gold prices retreated from record highs amid profit-taking and a risk-on environment. However, expectations of a dovish Federal Reserve and potential rate cuts in September continue to support gold. The market will closely watch upcoming US economic data for further direction.
Disclaimer:
CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.
