Gold price rises to fresh all-time peak amid Fed rate cut expectations

• Gold price continues to attract buyers amid growing September Fed rate cut bets.
• Tuesday’s upbeat US Retail Sales data underpins the USD and might cap the metal.
• The risk-on mood further warrants caution before positioning for additional gains.

Gold price (XAU/USD) builds on the previous day's strong move up and touches a fresh all-time high, around the $2,476-2,477 area during the Asian session on Wednesday. The recent comments by Federal Reserve (Fed) officials cemented expectations about an imminent start of the rate-cutting cycle in September. This, in turn, keeps the US Treasury bond yields depressed near a multi-month trough and is seen as a key factor benefiting the non-yielding yellow metal. 

Bulls, meanwhile, seem rather unaffected by a modest US Dollar (USD) uptick, which tends to undermine the USD-denominated commodities, including the Gold price. Even the prevalent risk-on environment – as depicted by an extension of the uptrend across the global equity markets – also does little to dent demand for the safe-haven precious metal. This suggests that the path of least resistance for the XAU/USD is to the upside, though slightly overbought conditions might cap gains. 

Daily Digest Market Movers: Gold price benefits from dovish Fed expectations, despite modest USD uptick

• The recent comments by Federal Reserve officials reaffirmed expectations of an interest rate cut in September, which continues to drive flows towards the non-yielding Gold price. 
• Fed Chair Jerome Powell said on Monday that inflation readings during the second quarter showed more progress was being made on bringing the pace of price increases to the target.
• San Francisco Fed President Mary Daly showed growing confidence that inflation is heading toward the central bank's goal and added that she expects a policy adjustment at some point.
• Fed Governor Adriana Kugler noted on Tuesday that downside risks to employment have become more balanced and continued labor market rebalancing suggests inflation will move towards the target.
• Kugler further added that it will be appropriate to begin easing monetary policy later this year if economic conditions continue to evolve favorably and if the labor market cools too much.
• Traders are now pricing in multiple rate cuts by year-end, dragging the yield on the benchmark 10-year US government bond and the rate-sensitive 2-year Treasury yield to a multi-month low.
• Meanwhile, the US Dollar draws support from Tuesday's upbeat US Retail Sales data, which pointed to consumer resilience and bolstered economic growth prospects for the second quarter.
• The Census Bureau reported Retail Sales in the US remained unchanged in June and the previous month's revised higher to show a growth of 0.3% as compared to the 0.1% reported originally. 
• This, along with an extension of a bullish run across the global equity markets, might hold back traders from placing fresh bullish bets around the safe-haven XAU/USD and cap gains.

Technical Analysis: Gold price could pause the uptrend near the $2,500 mark amid slightly overbought oscillators

From a technical perspective, the overnight sustained breakout through the $2,425-2,430 supply zone and a subsequent move beyond the $2,450 area, or the previous all-time peak, could be seen as a fresh trigger for bullish traders. That said, oscillators on the daily chart have just started moving in overbought territory and warrant some caution before positioning for additional gains. Hence, any further move-up is more likely to face some resistance and pause near the $2,500 psychological mark 

On the flip side, any meaningful slide below the $2,450 area might now be seen as a buying opportunity and remain limited near the $2,430-2,425 resistance breakpoint, now turned support. A convincing break below the latter, however, might prompt some technical selling and drag the Gold price to the $2,400 mark. Some follow-through selling below the $2,390 area could pave the way for deeper losses towards testing the next relevant support near the $2,360 region.