- Gold at fresh all-time high; aims for another move higher.
- Short-term risk positive, but overbought conditions threaten five-week rally.
Gold started the week on positive note, edging softly up to unlock a new record high of 3,719 thanks to Friday’s quick rebound near the 3,630 support area.
The Fed has opened the door to two more 25bps rate cuts by the end of the year. However, this scenario is not fully priced in and the central bank’s communication could provide some direction this week along with the core PCE inflation figures, as policymakers are scheduled to take to the podium. Coupled with elevated geopolitical tensions over the war in Ukraine and falling Treasury yields, gold may have scope to achieve new milestones.
The area around 3,727 could act as immediate resistance as the RSI and the Stochastic oscillator are sloping upwards but are still close to overbought territory, warning that the five-week bullish streak may have limited upside in the short term. Should the price find new buyers, the 3,800 and 3,900 psychological marks could next come on the radar ahead of the all-important 4,000 level.
On the downside, the 3,600-3,630 zone may keep buffering downside pressures. If not, the 20-day simple moving average (SMA) could come to the rescue at 3,590 for the first time in a month. Failure to pivot there could expose the 3,500 region.
Summing up, gold is setting the tone for another push higher. A sustained break above 3,730 could generate fresh buying interest.
