Gold Price Extends Rally to Record Levels
Gold prices climbed to fresh all-time highs on Tuesday as traders positioned for more U.S. interest rate cuts and awaited key signals from Federal Reserve Chair Jerome Powell. Spot gold is now approaching the swing target of 3879.64, with momentum supported by strong demand and a softer outlook for monetary policy.
Fed Rate Cut Bets Boost Bullish Momentum
Markets turned decisively dovish after the Fed delivered its first rate cut of the cycle last week. The 25-basis point reduction fuelled expectations of additional easing before year-end. Fed Governor Stephen Miran added to the case for aggressive cuts, warning that the central bank risks damaging the labour market if it holds policy too tight. Traders are now pricing in a 90 percent chance of another cut in October and a 73 percent probability of one in December.
Institutional Demand Surges
Support for gold is also reflected in institutional flows. The SPDR Gold Trust reported holdings of 1000.57 tons on Monday, the highest level in more than three years, marking a 0.60 percent daily increase. Analysts highlight rising interest from institutional investors as well as physical buyers in India and China. In India, demand remains strong despite record local prices, with premiums reaching their highest levels in ten months ahead of the festive season.
Treasury Yields Retreat Ahead of Powell
U.S. Treasury yields eased ahead of Powell’s remarks and U.S. Flash PMI data. The ten-year yield dropped to 4.129 percent, while the two-year yield held at 3.597 percent. Investors are closely watching whether Powell supports the call for deeper easing or maintains a cautious approach. Any shift in tone could drive sharp moves in the dollar and in bond markets, directly influencing gold’s next leg.
Technical Outlook for Gold Prices
From a technical perspective, gold remains firmly bullish. The next resistance sits at 3879.64. Short-term support levels are seen at 3627.96 and 3612.83, while the broader uptrend holds above the 50-day moving average at 3453.22. The first sign of profit-taking would be a closing price reversal top, but as long as support holds, dips remain attractive for buyers.
Forecast: Bullish Bias Maintained
The fundamental and technical backdrop continues to favour further gains. Dovish Fed expectations, lower yields, and strong global demand all reinforce gold’s upside potential. A softer PMI print or a dovish Powell speech could provide the catalyst for a decisive breakout above 3879.64, opening the way for fresh highs.
