Gold prices (XAU/USD) have pared gains after hitting a fresh record high in the $2,482-2,483 range during the Asian session on Wednesday, currently trading near the lower end of their daily range. The ongoing risk-on sentiment, highlighted by the continued uptrend in global equity markets, has led to some intraday profit-taking. This pullback occurs amid a slightly overbought Relative Strength Index (RSI) on the daily chart.
The decline in gold prices lacks a clear fundamental catalyst and is likely to be cushioned by expectations of a dovish Federal Reserve. Investors are increasingly convinced that the US central bank will begin cutting rates in September, which has kept US Treasury bond yields near multi-month lows. This situation has prevented the US Dollar (USD) from staging a significant recovery from its three-month low, continuing to support the non-yielding gold price.
Given these conditions, any further decline in gold prices is expected to be limited and viewed as a buying opportunity. Traders are now turning their attention to the upcoming US Industrial Production figures for short-term market direction.
