The price of gold has stalled its rise just short of the $2,180 mark and is currently trading marginally flat near $2,165. While traders wait for additional remarks from Fed policymakers for new clues regarding the timing of the first rate cut of the year, the US dollar is consolidating broadly, leaving the gold market in a state of uncertainty.

Technical Overview

As long as buyers maintain control, the gold price is expected to test the measured goal at $2,251, given the presence of a bull flag.

The price of gold must first reclaim the $2,200 barrier after hitting a record high of $2,223.

There appears to be more upside in store as the 14-day Relative Strength Index (RSI) continues to rise while staying in positive territory.

Conversely, the low of the previous day, $2,157, provides immediate support and will be tested below, challenging the Bull Flag resistance at $2,150.

A persistent decline beneath the latter will jeopardize the $2,140 Bull Flag support level.

Fundamental Overview

Concerning its main competitors, the US dollar is declining from a five-week high of 104.50 following fresh selling in the USD/JPY pair and a stronger-than-expected Chinese Yuan fix. The most recent decline in the US dollar is assisting the gold price in regaining its lost ground.

From Friday’s year-to-date (YTD) highs of 151.86, the USD/JPY continues to decline as growing concerns about possible Japanese government involvement in the FX market strengthen the Japanese Yen.

In contrast to the Reuters estimate of 7.2267, the People’s Bank of China (PBOC) set the USD/CNY reference rate at 7.0996. The continuing weakening of the US dollar is exacerbated by rumors that Chinese officials have interfered by selling USD/CNY to bolster the Yuan.

With no new catalysts for the uptrend to resume, the gold price ends its two-day corrective slide from the new all-time high of $2,223.

The US Dollar made a strong recovery in the latter half of the previous week, following a steep decline along with US Treasury bond yields due to the Fed’s dovish interest rate stance.

The Fed’s economic estimates, which are represented by the so-called Dot Plot chart, still anticipated three rate cuts this year as of January. Following two straight months of higher inflation readings, markets have started pricing in two rate cuts from the Fed this year. Following its policy meeting in March, the Fed maintained its target range of key rates at 5.25% to 5.50%.

According to the CME Group’s FedWatch Tool, markets are now pricing in a 75% possibility that the Fed will start relaxing in June, up from a 59% probability before the Fed’s announcement.

Since there aren’t many high-impact releases on the US economy this week, the speeches made by Fed policymakers and the Core PCE Price Index data will continue to be the critical points of interest.

Meanwhile, the dynamics of the US dollar and general market sentiment will continue to influence the movement of the gold price.