Gold (XAU/USD) is consolidating near a fresh all-time high reached during Asian trading on Tuesday, as buyers pause amid overbought conditions and cautious sentiment ahead of Federal Reserve Chair Jerome Powell’s speech. A positive tone across equity markets also weighs slightly on safe-haven demand. Still, dovish Fed expectations and ongoing geopolitical risks continue to provide a strong floor for the yellow metal.
Fed easing outlook underpins gold
The Fed delivered its first rate cut since December last week and signaled two additional cuts for this year, citing softer labor market conditions. The move has fueled expectations of further monetary easing, with markets betting that the policy rate could fall below 3% by the end of 2026.
This has capped upside momentum in the US dollar, which retreated overnight from a one-week high, adding support to gold.
Geopolitical risks support safe-haven demand
Geopolitical tensions also remain a key driver for XAU/USD. Fighting between Russia and Ukraine has intensified, with both sides accusing each other of deadly drone strikes on civilian areas. NATO members Estonia, Poland, and Romania have accused Russia of repeated airspace violations—claims that Moscow denies.
In the Middle East, conflict escalates as Hamas launched multiple rockets on Israel amid ongoing Israeli military operations in Gaza. Heightened uncertainty continues to drive safe-haven inflows into gold.
Technical outlook: consolidation above $3,700
From a technical perspective, the breakout and daily close above $3,700 strengthens the bullish outlook. Despite the daily Relative Strength Index (RSI) flashing extremely overbought conditions, the broader uptrend remains intact.
Immediate support lies in the $3,726–3,725 area, followed by the psychological $3,700 level. A deeper pullback could expose the $3,686–3,685 zone, with a decisive break targeting the $3,651–3,650 region. A sustained move below the latter would signal potential bullish exhaustion and open the door for a sharper correction.
On the upside, a retest of the record peak remains likely if Powell’s comments reinforce market expectations of faster Fed easing.
