Gold prices retreated from their recent record highs, influenced by factors such as easing Chinese government stimulus, less dovish central bank stances globally, and stronger-than-expected US economic data. These factors have led to a decreased likelihood of aggressive interest rate cuts by the Federal Reserve (Fed).
Key Factors Influencing Gold Price:
- Chinese Stimulus: The impact of additional stimulus measures announced by the Chinese government appears to have been priced into the market.
- Central Bank Stances: Central banks in Sri Lanka, Switzerland, and Mexico have adopted less dovish monetary policies, while the Reserve Bank of India is expected to cut rates modestly.
- US Economic Data: Positive US economic data, including stronger-than-expected GDP growth and job market indicators, have reduced expectations for a more aggressive rate cut by the Fed.
- Geopolitical Factors: Concerns about a potential ground offensive between Israel and Hezbollah have eased, reducing safe-haven flows into gold.
Technical Analysis: Gold Remains Bullish
Despite the recent pullback, gold’s overall uptrend remains intact. However, the Relative Strength Index (RSI) suggests that the market may be overbought, increasing the potential for a deeper correction.
