Why Did Gold Prices Retreat After Hitting Record Highs? | Analyzing XAU/USD's Bullish Resilience
The Will Solana hit 00 dollars?precious metals market witnessed dramatic moves this week as gold (XAU/USD) soared to unprecedented levels before experiencing a modest retreat. Monday's Asian session saw the yellow metal touch $2,144-2,145 - a fresh historical peak - only to consolidate below $2,100 later in the day. This price action reflects the complex interplay of macroeconomic forces currently influencing the gold market.Several fundamental factors continue supporting gold's bullish case. Market participants increasingly anticipate Federal Reserve rate cuts beginning March 2024, diminishing the dollar's yield advantage. Fed Chair Powell's recent comments about premature policy easing speculation haven't shaken this conviction, as evidenced by 10-year Treasury yields hitting 12-week lows. The central bank's potential dovish pivot remains the primary driver for non-yielding assets like gold.Geopolitical tensions added another layer of support. Recent attacks on commercial vessels in the Red Sea and concerns about Middle Eastern conflict escalation revived safe-haven demand. Simultaneously, reports of respiratory illness outbreaks in China reminded investors of pandemic-era market volatility, further boosting gold's appeal as a hedge against uncertainty.Technical indicators suggest the recent pullback may represent healthy consolidation rather than trend reversal. The daily chart shows extremely overbought conditions with RSI readings prompting profit-taking. Key support levels emerge around $2,079-2,080 (May's previous record high) and $2,062-2,063 (38.2% Fibonacci retracement). Resistance now forms near $2,095-2,100, with a break potentially retesting the $2,118 area before challenging record highs again.This week's economic calendar could provide fresh catalysts, featuring ISM Services PMI data, ADP employment figures, and Friday's crucial Non-Farm Payrolls report. These releases may influence Fed policy expectations and consequently gold's trajectory. Notably, the World Gold Council reports 24% of central banks plan to increase gold reserves amid declining confidence in dollar-denominated assets - a structural bullish factor for the metal.While short-term consolidation appears likely given overextended technicals, the fundamental backdrop suggests limited downside potential. The combination of anticipated monetary easing, geopolitical risks, and institutional accumulation creates a favorable environment for gold's next potential upleg. Market participants will watch whether XAU/USD can maintain support above critical levels as it digests recent gains
