The price of gold fluctuated on Thursday, failing to take advantage of the gains from the previous day. One major issue limiting the price of precious metals is thought to be the Fed’s uncertain path toward rate cuts.

Technical Overview

As can be seen on the daily chart, the price of gold recovered from slightly above the crucial $2.145 support level, which also happens to be the 23.6% Fibonacci Retracement (Fibo) level of the most recent rally from the low of $1,984 on February 14 to the all-time high of $2,195. The low occurred on March 7.

The 14-day Relative Strength Index (RSI) eased out of the very overbought range to about 75.00, where it presently oscillates, marking the uptrend.

Buyers are waiting for an entrance over $2,180 once more to push the price of gold towards Tuesday’s high of $2,185, which will retest the all-time highs of $2,195. The psychological level of $2,250 and the $2,200 barrier represent the next important upside targets.

On the other hand, the initial demand region was observed at the $2,156 low on Wednesday. If that level is not held, the previously noted strong support will be put to the test once more at $2,145.

The static support at $2,125 will save the buyers further down. The 38.2% Fibo level of the same rise, or $2,116, is the final line of defense for buyers of gold.

Gold Basic Overview

With the odds of a June Federal Reserve (Fed) interest rate cut remaining essentially unchanged at roughly 70%, the US Dollar on Wednesday undid the majority of the strong rally in the US Consumer Price Index (CPI) data, persuading markets that a dovish policy shift is probably in the works by the end of the second quarter.

The US dollar’s resumption of weakness contributed to the record-breaking gold price increase, but sellers were once more active near $2,180 as a result of the ongoing rise in US Treasury bond yields across the curve.

As traders watch the highly anticipated US Retail Sales and Producer Price Index (PPI) data for new clues regarding the timing of the first Fed rate decrease of the year, it will be interesting to observe if the gold price gets upward momentum later on Thursday and retests the all-time high at $2,195. We’ll also be watching the weekly US Initial Jobless Claims data for any new trading catalysts affecting the price of gold.

After a 0.8% decrease in January, US retail sales are predicted to increase by 0.8% in February. In the meantime, February saw 1.1% YoY growth in the US PPI as opposed to a 0.9% increase the prior month. It seems unlikely that US consumer demand and any indications of sticky inflation will be good news for the price of gold.