XAUUSD Forecast: Gold Price to looks primed for a correction from record highs

• Gold price consolidates near fresh record highs of $2,729 ahead of Fed speak
• The US Dollar extends its corrective decline, as Treasury bond yields recovery falters
• The daily RSI holds within the overbought territory, a correction in the offing?

The gold price is maintaining its recent upward trend in the vicinity of a new record high of $2,729, which was reached early Monday. Gold buyers are anticipating a new trading impetus from the forthcoming speeches of US Federal Reserve (Fed) policymakers, as they take a break amid the ambiguity surrounding the US presidential election and the rife Middle East tensions.

As Fedspeak approaches, the gold price appears to be susceptible.

The US Dollar (USD) remains in its corrective mode, reflecting the resurgence of weakness in US Treasury bond yields. Chinese equities have recovered after the People’s Bank of China (PBOC) implemented a more substantial reduction in the one-year Loan Prime Rate (LPR) from 3.35% to 3.10%.

The PBOC policy pronouncements initially failed to impress the markets; however, they are now anticipating additional stimulus from China to bolster economic growth. In the interim, the gold price was maintained by the persistent tensions between Israel and Iran, as well as China’s stimulus optimism.

Following the announcement of the targeting of the offices of Hezbollah’s al-Qard al-Hassan financial institution, Israel conducted a new surge of air strikes on southern Beirut, as reported by Lebanese media institutions. Furthermore, the United States government has initiated an inquiry into the unauthorised disclosure of classified documents that provide information on Israel’s military preparations for a potential attack on Iran. In times of geopolitical unrest, investors tend to gravitate towards the traditional safe-haven of the gold price.

Nevertheless, the Trump rally’s revival could result in a resurgence of demand for the US Dollar. The 2024 US presidential elections are anticipated to be won by Republican nominee Donald Trump, according to the markets. Inflationary and advantageous to the Greenback, Trump’s fiscal and trade policies are perceived.

The absence of top-tier US economic data releases scheduled for Monday will maintain the emphasis on risk sentiment and the speeches of numerous Fed policymakers in order to provide a new directional impetus to the gold price.