Gold retreats from $3,707 record high as Dollar rebounds to 97.80

Sunil Kumar Dixit SK Charting

Gold is trading sideways within familiar range of $3660 resistance and $3630 support as bullish momentum takes a breather on retail profit booking pushing the metal prices down from $3707 high to $3627 on improved jobless claims and Philadelphia Manufacturing Index numbers reinforcing investor sentiments adding tailwind to Dollar rising from 96.20 lows to 97.80

Fundamental drivers

1. Federal Reserve rate cut

The US Federal Reserve cuts key interest rates by 25 bps to 4.00-4.25%.
Fed Chair J Powell emphasized it as a risk-management move while keeping a data-dependent stance subject to assessments over the next meetings.

2. US Dollar reaction

Dollar index showed mild strength after the Fed, limiting gold’s upside.
Short-term pullbacks possible as DXY tries to rebound from 96.20 lows reaching high of 97.80.

3. Bond yields and inflation

Yields edged lower post after interest rate decision, which is supporting gold prices.
Inflation remains sticky, preventing aggressive rate-cut expectations over next fed meetings.

4. Global market sentiment

Investors are in “buy-the-dip” mode on gold. Every dip is attracting buyers as seen on dips around $3627 as well as $3632, Gold witnessed rebound to $3660.
Uncertainty around economic slowdown keeps gold attractive as a hedge.

Technical drivers

The primary trend for Gold remains extremely bullish supported by macro factors favouring safe haven demand and smart money flowing in on dips. However, intraday consolidation below recent highs caps gains affected by recovery attempts in Dollar Index.

As a usual occurrence, every new record high is quickly followed by a pullback towards breakout zone and immediate support as retail traders prioritize profit booking when RSI shows overbought conditions on small time frames.

Key Pivot: 3660 – acts as turning point for further acceleration towards next resistance $3668-$3675.

Resistance Levels: 3668 / 3675 / 3695.

Support Levels: 3643 / 3632 / 3626.

Indicators:

4 Hourly RSI cooling down from overbought but still above 50 supports bullish bias.
Price respecting moving average supports on lower time frames, 4 Hourly 50 EMA aligns with $3643

Overall intraday bias

Strong Break above 3660 = Bullish continuation.
Strong Break below 3642 = Bearish momentum.

Author

Sunil Kumar Dixit

SK Charting

Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.

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