Market Analysis
Gold prices (XAU/USD) continue to attract buyers for the seventh consecutive day, reaching a new record high around the $2,288-2,289 range during the Asian session.
The surge is primarily driven by a flight to safety amid geopolitical tensions arising from the Russia-Ukraine conflict and conflicts in the Middle East.
Additionally, uncertainty surrounding the Federal Reserve's rate cut plans and a recent earthquake in Taiwan dampen investor sentiment, leading to a weaker tone in equity markets and bolstering demand for the safe-haven asset.
The US Dollar (USD) is experiencing a retracement from recent highs, further supporting gold prices. Despite reduced expectations for Fed rate cuts, gold bulls remain resilient, overlooking the typical flow away from non-yielding assets. However, caution is advised due to overbought conditions indicated by the Relative Strength Index (RSI) on the daily chart. A period of consolidation or a modest pullback may precede further gains.
Technically, gold prices are in uncharted territory, with bullish momentum indicating potential to breach the $2,300 level. Nonetheless, the overbought RSI suggests prudence. Support levels are identified at around $2,265, followed by $2,250 and $2,228. A break below $2,228 could signal a shift in bias towards bearish sentiment, with $2,200 serving as a crucial support level.
Paraphrasing text from "FX Street" all rights reserved by the original author.