• The price of gold finds it difficult to profit from its intraday surge to a new all-time high.
• A little overbought RSI encourages some profit-taking in the risk-on scenario.
• Bets for the September Fed rate cut keep the USD bulls in check and provide support.

After reaching a new all-time high in the $2,482-2,483 zone on Wednesday during the Asian session, the price of gold (XAU/USD) pares losses and is trading close to the lower end of its daily range. Amid a slightly overbought Relative Strength Index (RSI) on the daily chart, there is some intraday profit-taking due to the general risk-on climate, represented by an extension of the uptrend throughout the global equities markets. Other than this, there isn’t a clear fundamental driver behind the retreat, and expectations of a dovish Federal Reserve (Fed) will likely keep it muffled.

The US Treasury bond yields are kept low by investors’ apparent conviction that the US central bank will start its cycle of rate cuts in September. As a result, the US Dollar (USD) is unable to make any further progress from the three-month low it reached earlier this week, which should keep supporting the unyielding price of gold. Therefore, any further decline could still be viewed as a limited-edition purchasing opportunity. Now, traders are looking to the US Industrial Production data for a quick boost.

Daily Digest Market Movers: Risk-on attitude undermines gold price, Fed rate-cut predictions call for bearish prudence

• The assumption of a September interest rate cut was reinforced by the recent remarks made by Federal Reserve officials, which are pushing money towards the price of non-yielding gold.

• Inflation data from the second quarter indicated that more work was being done to slow the rate of price increases to the target, according to remarks made by Fed Chair Jerome Powell on Monday.

• President of the San Francisco Fed Mary Daly expressed increasing confidence that inflation is approaching the central bank’s target and mentioned that she anticipates a policy change eventually.

• On Tuesday, Fed Governor Adriana Kugler stated that the risks to employment on the downside have leveled out and that if the labor market continues to balance, inflation is likely to approach the objective.

• Kugler went on to say that if the labor market cools down too much and economic conditions continue to improve, it might be reasonable to start loosening monetary policy later this year.

• The yield on the benchmark 10-year US government bond and the rate-sensitive 2-year Treasury yield have dropped to multi-month lows as a result of traders pricing in numerous rate cuts before year’s end.

• The positive US Retail Sales data released on Tuesday, which highlighted consumer resiliency and enhanced expectations for second-quarter economic growth, supports the US dollar in the meantime.

• According to the Census Bureau, retail sales in the US stayed flat in June and were revised higher the previous month, showing a 0.3% gain instead of the 0.1% initially recorded.

• This might deter traders from making new optimistic wagers around the safe-haven XAU/USD and cap gains, along with the continuation of a bullish run throughout the global equities markets.

Technical Analysis: At $2,430–2,425 resistance–turned–support, the price of gold is set to rise even higher.

Technically speaking, a new trigger for bullish traders might be identified as the overnight sustained breakout over the $2,425-2,430 supply zone and a rise beyond the $2,450 region, or the previous all-time high. Nevertheless, oscillators on the daily chart are approaching the overbought zone and should be watched carefully before making any further gains. Therefore, it is more likely that any additional increase will encounter resistance and stall close to the psychological $2,500 threshold.

Conversely, any significant decline below $2,450 may now be viewed as a buying opportunity and be restricted to the $2,430–2,425 resistance breakpoint, which has now transformed into support. However, a strong break below the latter might lead to significant technical selling and push the price of gold down to $2,400. A little follow-through selling below $2,390 would open the door for further losses that would take the market below the next significant support zone, which is located around $2,360.