• Gold price hangs close to record highs of $2,664 early Wednesday.   
• The US Dollar licks wounds with Treasury bond yields as China MLF cut boosts sentiment.   
• Gold price enters extremely overbought conditions on the daily chart, risks a long-due correction.

Gold price is consolidating near the highest level on record at $2,664 early Wednesday, struggling for a fresh upside boost amid a risk-on market profile and extremely overbought conditions on the daily chart.

Gold price extends winning streak, but for how long?

Risk sentiment receives a fresh boost in Asian trading on Wednesday after the People’s Bank of China (PBOC) cut the one-year Medium-term Lending Facility (MLF) rate from 2.30% to 2.0% on Thursday, in a bid to shore up the dwindling economy. The MLF rate reduction is one such measure among a host of other stimulus efforts rolled out by China lately.

Gold price appears to lack a bullish conviction, at the moment, as China stimulus optimism weighs on the traditional safe-haven on one side while on the other hand, it raises hopes of a potential increase in Chinese demand, as the dragon nation is the world’s top Gold consumer.

However, Gold price draws support from rallying global equities and growing expectations that the US Federal Reserve (Fed) will opt for a 50 basis points (bps) interest rate cut in November, which continue to undermine the US Dollar (USD) and the US Treasury bond yields.

On Tuesday, the USD was dumped across the board alongside the US Treasury bond yields on China’s stimulus-driven risk flows and weak US Conference Board (CB) Consumer Confidence and regional activity data. Soft data stoked another outsized Fed rate cut expectations at the upcoming meeting.

The CB Consumer Confidence Index dropped to 98.7 this month from an upwardly revised 105.6 in August, registering the largest decline since August 2021. Meanwhile, The Richmond Fed index fell to a 52-month low of -21 from a prior low of -19 in August and a low before that of -17 in July.

Markets are currently pricing in about a 60% chance of such a move, the CME Group’s Fed WatchTool shows. For the next two Fed meetings, rate futures are implying more than 80 bps in cuts. Additionally, the US Dollar also bore the brunt of the sell-off in US Treasury bond yields across the curve, triggered by a strong auction of US two-year government bonds.  

Looking ahead, there is no top-tier US economic data in the docket. However, speeches from Fed policymakers and risk trends will continue to play a pivotal role in the Gold price action. Further, Gold traders could also resort to repositioning ahead of a bunch of Fedspeak due Thursday, including the key opening remarks from Fed Chair Jerome Powell at the US Treasury Market Conference in New York.  

Gold price technical analysis: Daily chart

As observed on the daily chart, the extremely overbought conditions, as represented by the 14-day Relative Strength Index (RSI) flriting with the 80 level, suggest that a correction could be in the offing.  

If buyers flex their muscles, acceptance above the $2,670 round level is critical to unleashing further upside toward the $2,700 barrier.

On the flip side, any correction in Gold price will likely test the previous day’s low of $2,623, below which the $2,600 threshold will come into play.

Further south, Gold sellers could target the September 20 low of $2,585.

• Gold prices advance, underpinned by ETF Flows, China stimulus and safe haven flows,
• Gold ETF flows have been positive, and if this trend continues, it could further support the upward momentum of gold prices.
• From a technical analysis perspective, gold is in overbought territory, but this may not be a significant obstacle. The psychological $2,650 and $2675 handles are the next key resistance levels to watch.

Most Read: China Slashes Rates – Stimulus Package by PBoC Welcomed by Markets

Gold prices continue to hold the high ground, underpinned by heightened tension in the Middle East and stimulus from China. The precious metal is enjoying its best year in 14 as a host of challenges and concerns plague market participants.

Gold continues to print fresh highs as geopolitical headwinds continue to sway back and forth. Earlier today we had a stimulus package announcement by the People’s Bank of China (PBoC) which has further aided the precious metal. As big as the stimulus package from China is, I do not believe it will hold a major sway on Gold prices but rather other metals in the sector. 

Ongoing dovish comments from Federal Reserve officials only serve to add fuel to a fire which is already raging. Some policymakers have hinted at more aggressive cuts ahead which have underpinned gold prices to a degree overnight. The question regarding a lot of these events is how much of the premium is yet to be priced in given the current nature of the market.

As things stand, markets are pricing in another 50 bps cut from the Federal reserve at the November meeting. 

Source: CME FedWatch Tool

Gold ETF Flows Hint at Further Support

ETF flows remain positive following a huge spike in July to 47.7 tonnes. August came in more modest at around 28.5 tonnes the equivalent to $2.1 USD. North America led the way with the Western markets more active at present.

Source: LSEG, World Gold Council

Despite the excellent inflows over the last four months the year-to-date losses remain around 44 metric tonnes. The idea is that if these inflows continue however, this could keep the gold rally moving in the upward direction. Economists and analysts continue to upgrade their yearly forecasts.

JP Morgan for its part stressed that the retail-focused ETF builds will be key for a sustainable gold rally, raising its price target for the precious metal to $2850/oz in 2025.

Economic Data

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

On the economic data front, we do have some high impact US data which could impact the US Dollar and thus gold prices. However, it would require the Core PCE data print to be extremely hot on Friday to see any lasting impact on the rate cut expectations from the Fed.

Despite comments from Fed policymaker Bowman today intimating that inflation risks remain this is a long shot and any uptick in inflation may just be a temporary reprieve for Gold prices on its march higher.

Technical Analysis Gold (XAU/USD)

From a technical analysis standpoint, Gold is tough to read at the minute particularly where areas of resistance is concerned. As we continue to print fresh all time highs it makes it difficult due to the lack of historical price data to analyze. 

To put things into perspective, the RSI on the daily, weekly and monthly timeframe are all in overbought territory. However, as we know an instrument can languish weeks and sometimes months in overbought territory on the larger timeframes so this seems to be irrelevant at present.

The psychological 2650 mark is the most immediate area i would keep an eye on as we may see a reaction or profit taking at this area. Market participants love whole numbers and when it comes to gold the ’50 and 75′ levels are always key.

Looking at support and the 2625 area has been key over the last two days serving as a base fro gold on the smaller timeframes as the precious metal advance toward the 2650 handle. This may be a level worth monitoring moving forward.

GOLD One-Hour (H1) Chart, September 24, 2024

Source: TradingView (click to enlarge)

Support

Resistance

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Zain is an experienced financial markets analyst and educator with a rich tapestry of experience in the world of retail forex, economics, and market analysis. Initially starting out in a sales and business development role, his passion for economics and technical analysis propelled him towards a career as an analyst.

He has spent the last 3 years in an analyst role honing his skills across various financial domains, including technical analysis, economic data interpretation, price action strategies, and analyzing the geopolitical impacts on global markets. Currently, Zain is advancing in obtaining his Capital Markets & Security Analyst (CMSA) designation through the Corporate Finance Institute (CFI), where he has completed modules in fixed income fundamentals, portfolio management fundamentals, equity market fundamentals, introduction to capital markets, and derivative fundamentals.

He is also a regular guest on radio and television programs in South Africa, providing insight into global markets and the economy. Additionally, he has contributed to the development of a financial markets course approved by BankSeta (Banking Sector Education and Training Authority) at NQF level 6 in South Africa.

Breakouts on Multiple Time Frames

A monthly bullish breakout and double bottom breakout on the weekly and daily charts triggered two weeks ago on a move above 2.30. There was a bit of a lag in the advance afterwards as the breakout was followed by six days of consolidation. On the sixth day natural gas fell to test support around the 200-Day MA (blue) and it found it. Price was rejected from the 200-Day line as buyers took back control leading to two strong days up, followed by today’s high.

Strong Underlying Momentum

Given the strong upward momentum that followed the double bottom breakout and remaining higher targets, it seems likely that natural gas will make another attempt at higher prices following a retracement or consolidation. Strength was recently confirmed by the 20-Day MA crossing above the 200-Day MA and the 50-Day MA has just begun to turn up.

Moreover, a bullish reversal triggered this month on the monthly chart, and strength was further confirmed on the subsequent advance to a three-month high as July’s high of 2.60 was exceeded. The double bottom pattern points to a potential target around 2.72. If that price level is exceeded, then natural gas has a chance to test resistance around the downtrend line. For now, the 78.6% retracement at 2.89 can be used as a proxy for the trendline.

2.50 May See Support

Today’s high reached the top of a previously identified potential resistance zone from 2.65 to 2.67. Resistance was seen from the 61.8% Fibonacci retracement level at 2.67. Although a retracement to test support around the breakout level of 2.30, if bullish momentum is to stay strong a shallower retracement seems more likely. The 38.2% Fibonacci level is at 2.50, while the 50% retracement at 2.45 is joined with the prior swing high at 2.44.

For a look at all of today’s economic events, check out our economic calendar.

XAU/USD Current price: $2,646.50

• Market players lifted bets of another 50 bps rate cut by the Federal Reserve.
• United States data surprised negatively, hurting demand for the US Dollar.
• XAU/USD trades at fresh record highs without signs of giving up.

Gold price hit yet another record high on Tuesday, changing hands as high as $2,639.99 a troy ounce during Asian trading hours, to break higher after Wall Street’s opening. The absence of relevant macroeconomic releases left financial markets without a fresh directional catalyst throughout the first half of the day, although the prevalent US Dollar’s weakness kept XAU/USD on the bullish side.

The bright metal extended gains beyond the $2,640 mark during the American session and after the release of discouraging United States (US) data. Consumer sentiment in the country deteriorated in September, with The Conference Board’s (CB) Consumer Confidence Index falling to 98.7 in September after printing at 105.6 in August. Even further, the Present Situation Index fell by 10.3 points to 124.3, while the Expectations Index declined by 4.6 points to 81.7 but remained above 80. Readings below it usually anticipate a recession. As a result, market participants lifted bets the Federal Reserve (Fed) could trim interest rates by 50 basis points (bps) once again in November.

Other than that, the Richmond Fed Manufacturing Index contracted to -21 in September from the previous -19 while missing the -17 anticipated. The macroeconomic calendar will remain scarce on Wednesday, with the focus moving to the end of the week when the US will release the August Personal Consumption Expenditures (PCE) Price Index.

XAU/USD short-term technical outlook  

XAU/USD trades around $2,645 with no signs of giving up. In the daily chart, the pair keeps posting higher highs and higher lows, while technical indicators maintain modest bullish slopes within overbought levels. At the same time, the pair develops far above bullish moving averages, with the 20 Simple Moving Average (SMA) now hovering at around $2,545.

The near-term picture also skews the risk to the upside, although some timid divergences anticipate a potential corrective slide. In the 4-hour chart, moving averages accelerated north far below the current level, in line with continued buying interest. However, the Momentum indicator keeps grinding lower in positive territory, diverging from price action. Finally, the Relative Strength Index (RSI) indicator maintains the positive bias, advancing near overbought readings just ahead of overbought readings.

Support levels: 2,628.10 2,613.50 2,598.10  

Resistance levels:  2,650.00 2,675.00 2,690.00

• Gold price off record highs at $2,635 early Tuesday, focus on Fedspeak, US data.  
• The US Dollar bounces with Treasury bond yields even as risk flows return on China optimism.  
• Gold buyers refuse to give up despite overbought RSI conditions on the daily chart.  

Gold price is moving slightly away from a new record high of $2,635 early Tuesday, replicating the price action seen in Monday’s Asian trading. Traders look forward to a fresh slew of speeches from the US Federal Reserve (Fed) policymakers and the US Consumer Confidence data before placing more bullish bets on Gold price.  

Gold price cheers dovish Fed, geopolitics and China stimulus hopes

Despite a modest recovery staged by the US Dollar and overbought conditions on the daily chart, Gold price holds its position close to the all-time high, as buyers refuse to give up on the back of the latest dovish Fed commentaries, increased hopes of Chinese stimulus coming through and escalating Middle East geopolitical tensions.

At the highly-anticipated press conference, People’s Bank of China (PBOC) Governor Pan Gongsheng announced a series of measures to boost the economic recovery, including plans to cut the reserve requirement ratio (RRR) by 50 basis points (bps). Increased expectations that these stimulus measures would stimulate the economy keep the pullback restricted in Gold price. China is the world’s top yellow metal consumer.

In addition, Bloomberg reported that Israel intensified its airstrikes in southern Lebanon, killing about 500 people while injuring 1000. This was the deadliest attack since the 2006 Israel-Hezbollah war. This follows the weekend’s exchange of missiles by both Israel and Hezbollah, as the Middle-East strife seems to translate into a wider regional conflict. Gold price tends to benefit from geopolitical tensions due to its traditional safe-haven status.

Meanwhile, Gold buyers also stay hopeful, as markets are wagering another 50 bps rate hike in November, courtesy of the dovish Fed talks. Fed policymakers continued to advocate the need for more rate cuts amid looming downside risks to the labor market, as inflation continues to move closer to the bank’s 2.0% target. Amongst the Fed officials who spoke on Monday, Chicago Fed President Austan Goolsbee was the most dovish, noting that “many more rate cuts are likely needed over the next year, rates need to come down significantly.”

The focus now remains on Fed Governor Michelle Bowman’s speech and the US Conference Board (CB) Consumer Confidence data for fresh trading incentives in Gold price, as Middle East escalation will be also closely eyed.

On Monday, Gold price recorded a fresh all-time high after a brief retreat, underpinned by a renewed decline in the US Dollar, as markets turned risk-averse on discouraging global business PMI reports. The S&P Global US preliminary Manufacturing PMI contracted further to 47.0 in September, compared to 48.5 expected and August’s 47.9. The Services PMI also dipped to 55.4 in September from 55.7 in August.

Gold price technical analysis: Daily chart

As observed on the daily chart, the overbought conditions, as represented by the 14-day Relative Strength Index (RSI) sitting above 70, continue to warrant caution for Gold buyers.

If buyers fight back control, acceptance above the record high of $2,635 is critical to unleashing further upside toward the $2,650 psychological barrier. The next relevant resistance is seen at the $2,700 threshold.

Should the corrective downside gather traction, Gold price will likely test the previous day’s low of $2,613, below which the $2,600 threshold will come into play.

Further south, Gold sellers could target the September 20 low of $2,585.

XAU/USD Current price: $2,628.68

• Federal Reserve officials aligned before Chair Powell’s dovish message.
• The United States will publish the August PCE Price Index this week.
• XAU/USD trades near fresh record highs, partially losing its bullish momentum but far from bearish.

Spot Gold traded as high as $2,634.74 a troy ounce on Monday, achieving yet another record high. XAU/USD currently hovers around $2,530, as the broad US Dollar weakness maintains the pair afloat. The Greenback found near-term demand throughout the first half of the day, but gains were modest, and the USD advance looked corrective.

It later suffered a setback as multiple Federal Reserve (Fed) officials publicly supported last week’s decision to trim rates by 50 basis points (bps) while hinting at more monetary loosening in the next few months. The dovish shift in policymakers’ tone did not impact Wall Street, as US indexes hover around their opening levels, not far from the highs posted last week.

Meanwhile, S&P Global released the preliminary estimates of the United States (US) September Purchasing Managers Indexes (PMIs), which showed business activity growth remained robust in the month. The Manufacturing PMI declined to 47 from the previous 47.9, missing the 48.5 anticipated by financial markets. On the other hand, the Services PMI posted 55.4, which is better than the 55.2 expected. Finally, the Composite PMI was reported at 54.4, slightly below the previous 54.6.

By the end of the week, the US will publish the August Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge. The data could hint at what the central bank may do next and whether aggressive rate cuts would become the norm.  

XAU/USD short-term technical outlook  

XAU/USD is up for a third consecutive day, and technical readings maintain the bullish case alive despite the easing momentum. The daily chart shows technical indicators are stabilizing within overbought readings while moving averages maintain their positive strength far below the current level. In fact, the 20 Simple Moving Average (SMA) stands at around $2,540, reflecting bulls’ strength in the last few weeks.

In the near term, and according to the 4-hour chart, some unconfirmed bearish divergences hint at a potential correction. Technical indicators pulled back from their recent highs with neutral-to-bearish slopes, supporting a near-term retracement. At the same time, XAU/USD keeps developing above bullish moving averages, with the 20 SMA accelerating north above the longer ones and acting as dynamic support at around $2,597.

Support levels: 2,613.50 2,698.10 2,684.60

Resistance levels: 2,635.00 2,650.00 2,675.00 

I had been positioned for this previously, although I was focusing more on the idea of colder temperatures coming to the stage. So, we may have a spike, a pullback, a pretty significant pullback, and then that move again. Traders are starting to bring in the idea of those colder temperatures. So, this hurricane threat kind of all hits at the right time to just really get things going. Now, with that being said, I do think that you can’t chase it here. You also can’t do a huge position.

You have to be very cautious about overextending yourself. If we get a significant pullback, perhaps the hurricane comes to the Gulf of Mexico, nothing really happens. That might be your entry point. But again, as you know, you’ve been watching me here, I’m actually long via an ETF. So, while the gains are substantial here, and I may trend trim some of them, the reality is I’m not levered that much, so I don’t really care. The only way to play this market is swing trading with low leverage that I have found.

For a look at all of today’s economic events, check out our economic calendar.

What is the current price of platinum?

The price of platinum opened at $988.65 per ounce, as of 9 a.m. That’s up 1.20% from the previous day and up 0.09% from the beginning of the year.

The lowest trading price within the last day: $966.83 per ounce. The highest platinum spot price in the last 24 hours: $994.65 per ounce.

Current platinum price

Platinum price chart

The chart below shows how the spot price of platinum is trending over the year.

Year to date, platinum is up 0.09%, as of 9 a.m. The 52-week high reached $1,049.10 on June 7, 2023, and the 52-week low dropped to $843.15 on Nov. 10, 2023.

The precious, silvery-colored metal is priced in U.S. dollars. This means that the fluctuations in the value of the U.S. dollar can impact its price.

The price of XPT/USD reflects the value of one ounce of platinum in U.S. dollars, and it is traded like traditional currency pairs. Because platinum trades occur globally, investors can also track the spot price of platinum in other currencies, such as XPT/EUR for euros and XPT/GBP for British pounds.

Factors that can influence the price of platinum include changes in demand, geopolitical events and tensions in major platinum-producing countries. Of course, investor opinion and speculation can also affect prices.

Precious metals spot prices

Platinum is one of four main precious metals investors can trade via physical bullion, exchange-traded products or futures contracts. Gold, silver and palladium spot prices are also updated 24/7 in various currencies.

Platinum vs. gold price

Currently, platinum trades at $988.65 per ounce, as of 9 a.m., compared to gold, which trades at $2,576.43 per ounce. Year to date, platinum prices are up by 0.09% and gold prices are up by 24.69%.

“Historically, platinum has often been more expensive than gold due to its relative scarcity and unique properties. However, the price of platinum can fluctuate in response to changing market conditions,” said John Bergquist, president of Elysium Financial.

Political instability and supply disruptions in major platinum-producing regions like South Africa and Russia affect prices.

The silvery metal also tends to be a less reliable store of value than gold.

While historically, platinum has been pricier than gold, that flip-flopped briefly in August 2011. When looking at the gold-to-platinum price ratio, platinum was priced above gold from January 2013 until December 2014. Since then, gold has more than doubled its value compared to platinum prices.

History of platinum prices

Like any metal, the price of platinum can be volatile. Various factors affect it, the most significant being supply and demand dynamics. Other factors, such as economic conditions, geopolitical events, and changes in industrial and investment demand, can also impact the price of platinum.

At the start of the new millennium, the precious metal’s spot price was around $420. Fast-forward over 20 years, and the current price of platinum has more than doubled.

The spot price soared to new heights, trading in February 2008 at around $2,200 per troy ounce. In November of that year, the price returned to less than $1,000.

Platinum’s spot price has fluctuated between around $800 to $1,400 for the past decade, hovering around the $1,000 threshold on average.

Platinum prices today remain historically low. Prices dropped as low as $623.50 in March 2020 during the COVID-19 pandemic. While prices have recovered, platinum is nowhere near its all-time high of $2,213.20, set on March 3, 2008.

Platinum futures

Futures contracts let investors speculate on the future price movements of an underlying asset like platinum.

These financial contracts represent an agreement between two parties to trade a set amount of platinum at a specified price at a future date. They can be settled by exchanging the physical commodity or cash in place of the commodity.

Futures contracts differ from spot prices in that futures contracts establish a future price whereas spot prices are for immediate delivery. These contracts can be fulfilled by trading the physical commodity or exchanging cash in place of the underlying asset. They are usually traded through an exchange.

Platinum as an investment

The automotive industry creates the highest demand for platinum. Platinum is a key component in manufacturing catalytic converters, which are responsible for reducing vehicle emissions.

In addition to the automotive industry, platinum is widely used in the industrial industry to create medical products, nitric acid and glass. As the demand for these products rises, so does the price of platinum.

It is anticipated that platinum will play an essential role in the development of hydrogen technology. Platinum is used to produce carbon-free hydrogen from renewable energy.

“If hydrogen-based power meets expectations in the coming decade, then one could expect a material demand tailwind in platinum,” said Stash Graham, managing director of Graham Capital Wealth Management.

Precious metals such as platinum, gold and silver have long been used to diversify an investment portfolio.

When choosing investments, it is crucial to consider potential drawbacks. While there may be an increase in the demand for platinum, other factors may throw a wrench in the investment benefits.

When considering an investment, it is essential to consider your current holdings and individual financial goals.

Platinum is rarer than both silver and gold, which could make it attractive to investors seeking a scarce metal. This practice helps protect other holdings, such as stocks, in an economic downturn. Investing in platinum can help balance inflation and economic uncertainties.

Frequently asked questions (FAQs)

• Silver price slumps to near $30.50 after a strong recovery in the US Dollar.
• Traders are split over whether the Fed will cut interest rates by 25 or 50 bps in November.
• Investors will focus on the preliminary US PMI for September.

Silver price (XAG/USD) faces sharp selling pressure above the key resistance of $31.00 and drops to near $30.50 in Monday’s European session. The white metal drops sharply as the US Dollar (USD) gains ground even though market speculation for the Federal Reserve (Fed) to opt for a second consecutive interest rate cut by 50 basis points (bps) remains firm.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rose swiftly by 0.4% above 101.00. A decent recovery in the Greenback makes investment in precious metals, such as Silver, an expensive bet for investors.

The CME FedWatch tool shows that the probability of the Fed reducing interest rates by 50 bps to 4.25%-4.50% in November is close to 50%. For the remainder of the year, trades have priced in a 75-bps interest rate cut. On the contrary, Fed policymakers see the federal fund rate heading to 4.4% by the year-end.

Going forward, investors will focus on the United States (US) preliminary S&P Global Purchasing Managers’ Index (PMI) data for September, which will be published at 13:45 GMT. Economists estimate the Manufacturing PMI to have improved to 48.5 from 47.9 in August. However, a figure below the 50.0 threshold is considered a contraction. The Services PMI is expected to have expanded at a slower pace of 55.2 from the prior release of 55.7.

Silver technical analysis

Silver price trades in a Rising Channel chart formation, on a four-hour timeframe, in which the upper portion acts as resistance. Each pullback is considered a buying opportunity by market participants.

The white metal has dropped to near the 50-period Exponential Moving Average (EMA) near $30.36, suggesting an uncertainty ahead. However, the upside bias remains intact.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, suggesting a weakening of momentum.

Silver four-hour chart

(This story was corrected on September 23 at 11:39 GMT to say that the US Services PMI is expected to have expanded at a slower pace of 55.2 from the prior release of 55.7.)

• Gold price flirts with record highs near $2,625 early Monday.  
• The US Dollar rebounds with Treasury bond yields, awaiting US PMI data and Fedspeak.  
• Overbought daily RSI warrants caution for Gold buyers, as $2,550 support remains in sight.

Gold price is looking to build on its two-day uptrend in Asian trades on Monday even as the US Dollar (USD) attempts a tepid recovery alongside the US Treasury bond yields in the run-up to the global preliminary business PMI data.

Gold price eyes Mid-East concerns, US PMI data

Following the jumbo US Federal Reserve (Fed) interest rate cut-led subdued performance, the USD buyers ae trying their luck at the start of the new week, underpinned by escalating Middle East geopolitical tensions even as markets price in another 50 basis points (bps) Fed rate cut in November.

On Saturday night, Hezbollah fired at least 10 missiles into northern towns and cities of Israel’s Jezreel Valley, the Times of Israel reported. In response, Israeli jets carried out a series of retaliatory strikes across southern Lebanon, targetting at least 110 Hezbollah positions. 

The Greenback also finds support from the US House Republicans’s announcement to unveil a stopgap spending bill to fund the government through December 20. The bill due to be voted on the House floor by mid-week.

The uptick in the US Treasury bond yields aids the US Dollar’s latest leg higher but the further upside depends upon the upcoming Euro are and US preliminary Manufacturing and Services PMI data.

Should the PMI reports rekindle recessionary fears worldwide, the US Dollar recovery could likely gain traction on increased safe-haven buying, triggering a fresh correction in the Gold price from record highs.

However, the downside in Gold price is likely to remain cushioned by the expectations of another 50 bps rate cut by the Fed and looming Middle East tensions. Further, hopes for more stimulus coming in from China after the People’s Bank of China’s surprise rate cut early Monday, could also render positive for Gold buyers.

China’s central bank surprised markets by lowering its 14-day repo rate by 10 bps to stimulate the economic recovery impeded by the manufacturing sector slowdown and the property market woes.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price looks primed for a correction, as the 14-day Relative Strength Index (RSI) sits within the overbought territory, currently near 72.

If buyers manage to defy the bearish pressures, the $2,530 round level needs to be taken out decisively for further upside. Acceptance above that level will call for a test of the $2,650 psychological barrier, as buyers then target the $2,700 threshold for the first time ever.

On a corrective move lower, Gold price will test the previous day’s low of $2,585, below which the static support at around $2,550 will be challenged.

Depper correction could threaten the key support near $2,535, where the August 20 high and the 21-day Simple Moving Average (SMA) converge.