Gold prices maintained their upward movement on Tuesday, rising by 1.14% to trade at $2196 at the spot market and by 0.91% to trade at $2196 at the futures market. The commodity had recorded a daily high price of $2200, as of this writing, the second-highest price on record. The commodity is driven by growing acceptance that a Fed June rate cut is almost certain.
The US dollar has lost some of its lustre to gold as investors readjust for potential three rate cuts in 2024. The greenback enjoyed a stellar rise over the last two weeks and many dollar holders are preparing to cash in on the gains made during that period. Furthermore, yields on US Treasuries have fallen over the past three trading sessions, providing upward propulsion for gold. The two assets have an inverse relationship and gold currently offers a better payday than US Treasury bonds.
The yellow metal was previously rejected at $2222 on the heels of back-to-back forecast-beating US economic data. However, limited high-impact data on Tuesday and Wednesday raises the prospect of a new all-time-high price for the commodity. That said, the US dollar finds support from Durable Goods Orders data released on Tuesday. The figure rose in February by 1.4% from January’s decline of -6.9%, and beat the forecast 1.2%. Looking ahead, investors will likely reposition themselves for Thursday’s release of US GDP figures. However, the consumer confidence reading could provide some volatility for the rest of the trading session on Tuesday.
Technical analysis Gold price upside is likely to continue if the buyers manage to keep the commodity above the 2186 pivot level. Control by the buyers past the 2202 resistance level could build the momentum to revisit the 2222 ATH mark. However, a break below 2196 will put the sellers in charge, with their first target likely to be at 2177. A continuation of the selling momentum will likely break the support, thus invalidating the upward narrative and setting the stage to test 2166.
