- Gold price scales higher for the seventh straight day and advances to a fresh record peak.
- Rising geopolitical tensions in the Middle East continue to benefit the safe-haven XAU/USD.
- A weaker USD also lends support, though reduced June Fed rate cut bets might cap gains.
Gold price (XAU/USD) enters a bullish consolidation phase after touching a fresh all-time high, around the $2,288-2,289 area during the Asian session on Wednesday, and seems poised to appreciate further. Against the backdrop of persistent geopolitical risks stemming from the protracted Russia-Ukraine war and conflicts in the Middle East, the uncertainty over the Federal Reserve’s (Fed) plans to cut interest rates tempers investors' appetite for riskier assets. This is evident from a generally weaker tone around the equity markets and turns out to be a key factor acting as a tailwind for the safe-haven precious metal.
Apart from this, a modest US Dollar (USD) downtick is seen lending additional support to the Gold price. Bulls, meanwhile, seem rather unaffected by reduced bets for a June rate cut by the Federal Reserve (Fed), which tends to drive flows away from the non-yielding yellow metal. That said, overstretched conditions on the daily chart cap gains for the XAU/USD. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the commodity is to the upside. Hence, any meaningful corrective pullback could be seen as a buying opportunity and is more likely to remain limited.
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