Gold rally to continue?

XAUUSD continues to trade close to an all-time high (~$2164.56), driven by the market’s expectations of the interest rate cuts in the United States.

At the time of writing, investors imply a 75% chance of a rate cut in June.

However, during his recent speech in Congress, Fed’s Chair Jerome Powell refrained from giving any specific timetable, but stated that more confidence is needed and that “we are not far from it”.

The XAUUSD price has also received support from data showing strong central bank demand for physical gold. Central banks reportedly bought 39 tonnes of gold in January 2024.

On the retail side, the world's largest gold ETF, SPDR, saw its net asset value jump 2% (or ~$1.1 billion) between March 4 and March 7.

From the technical perspective

• Major simple moving averages (21, 50 & 100-period SMAs) are positioned below the current price, confirming a strong bullish trend
   
• Relative strength index (RSI) is in overbought condition (>70 – overbought, <30 – oversold), signaling a potential for a technical pullback
   
• Key immediate resistance and support levels are located at $2164.56 (all-time high) and $2150 round number respectively