gold prices are stabilizing near their recent record highs as traders adopt a cautious stance ahead of key speeches from U.S. Federal Reserve officials, including Chairman Jerome Powell. Following an encouraging high close to $2,670, investors are closely monitoring the outcome of these addresses, particularly regarding estimates for the next interest rate cut.
Market analysts indicate a significant probability, approximately 62%, that the Federal Reserve will implement a 50 basis point reduction in interest rates during its upcoming November meeting. This expectation has been bolstered by remarks from Fed Governor Adriana Kuglar, who expressed strong support for recent rate cuts and indicated backing for future reductions. This dovish sentiment has catalyzed increased speculation surrounding further monetary easing.
In the context of these developments, other economic indicators, such as the disappointing U.S. Consumer Confidence data and regional economic assessments, have heightened expectations for substantial policy action from the Fed. Early Thursday, optimism surrounding potential stimulus measures in China also contributed to a modest increase in gold prices, offsetting a prior recovery of the U.S. Dollar and Treasury bond yields.
Despite the recent uptick, gold remains in overbought territory, suggesting a potential correction in the near term. The 14-day Relative Strength Index (RSI) is hovering around 76, indicating that any further upward momentum may face challenges. Should bulls regain traction, maintaining price levels above the $2,670 level will be critical for pushing toward the next target of $2,700.
Conversely, in the event of a pullback, support levels will be tested at the September 24 low of $2,623, and if this breaks, further declines could see a test of the $2,600 level. Sellers may then aim for the September 20 low around $2,585, underscoring the current sensitivity of gold prices amid fluctuating risk sentiment and impending economic data releases.
