Gold prices retreated as investors took profits after the yellow metal rallied to an all-time high of $2,483 earlier during the North American session on expectations that the Federal Reserve would lower borrowing costs. At the time of writing, the XAU/USD trades at $2457, down more than 0.40%.Federal Reserve officials, led by Governor Christopher Waller, crossed the wires on Wednesday. He said the time to cut the policy rate is approaching, suggesting that the most likely direction for the Fed funds rate is downwards.Earlier, Richmond Fed President Thomas Barkin mentioned that inflation has decreased over the last quarter, acknowledging that the current policy is restrictive. However, he is open to the possibility that the policy “is not as restrictive as thought.”Meanwhile, US housing data fared better than expected in June, hinting the economy remains solid. Building Permits and Housing Starts improved compared to May, while Industrial Production decelerated but exceeded estimates.The non-yielding metal’s last leg-up was also driven by former President Donald Trump’s comments, in which he favors tax reductions, lower interest rates, and increased tariffs. These would likely be inflationary for the economy and weaken the Greenback.The US Dollar Index, which tracks the performance of the currency against other six, sinks some 0.49% at 103.72, its lowest level since March 21, 2024. US Treasury bond yields are also falling across the yield curve, with the 10-year Treasury note yielding 4.14%, down almost one and a half basis point (bps).
Daily digest market movers: Gold retreats as buyers take a breather close to $2,500
Gold technical analysis: XAU/USD retreats below $2,460 as buyers take a breather
Gold’s uptrend is set to continue, though buyers are taking a respite after hitting all-time highs shy of $2,490. Momentum is still in their favor, as shown by the Relative Strength Index (RSI), which dipped slightly but is still bullish.If XAUUSD resumes its uptrend, the first resistance will be the all-time high at $2,483. A breach of the latter will expose the $2,490 figure, followed by the $2,500 psychological level.On the flip side, If XAU/USD drops below $2,450, the first support would be the $2,400 figure, followed by the July 5 high at $2,392. If cleared, Gold would extend its losses to $2,350.
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