Gold price trades with mild positive bias above $2,625-2,624 pivotal support – FXStreet

• Gold prices rose on Tuesday, stalling a recent correctional decline from record highs.
• Bets for further Fed rate cuts and geopolitical risks continue to benefit XAU/USD.
• Traders are now anxiously awaiting the release of key US macro data in hopes of providing some meaningful stimulus.

Gold prices (XAU/USD) rose modestly during Asian trading on Tuesday, seemingly ending a two-day losing streak for now and halting a recent correction downhill from all-time highs hit last week. But the rally lacks bullish conviction amid a modest U.S. dollar strength, supported by Federal Reserve Chairman Jerome Powell's relatively hawkish tone on Monday. This, combined with optimism about China's economic stimulus, is a headwind for safe haven precious metals.

However, a significant decline in gold prices remains elusive as geopolitical risks from ongoing conflicts in the Middle East persist. Separately, expectations that the Fed will be able to cut interest rates further if US inflation continues to slow, and expectations that physical demand will recover due to China's economic stimulus should provide tailwinds for XAU/USD. Traders are now looking to US macro data and FedSpeak for fresh stimulus.

Daily Digest Market Movers: Gold prices benefit from geopolitical risks, bulls remain cautious amid moderate USD strength

• A series of stimulus measures from China last week continued to boost investor appetite for riskier assets, driving some money away from the traditional safe-haven gold price for the second day in a row on Monday.
• Additionally, Federal Reserve Chairman Jerome Powell has adopted a more hawkish tone on the economy, calling for two more 25 basis point rate cuts this year, assuming the economy performs as expected. He showed his perspective.
• Markets reacted quickly, dialing back expectations for more aggressive policy easing from the Fed and prompting follow-through profit-taking, especially in the low-yielding yellow metal, contributing to the decline.
• Meanwhile, markets are still pricing in the possibility of a major Fed rate cut by the end of this year, which, combined with persistent geopolitical tensions, is a tailwind for safe-haven precious metals.
• Two days after killing Hezbollah leader Hassan Nasrallah in an airstrike, Israeli forces have launched limited, localized and targeted ground raids in Lebanon, threatening to worsen the Middle East crisis.
• Israel last week rejected an offer by the United States and France for a 21-day ceasefire on the Lebanese border to give time for a diplomatic solution that would allow the return of displaced civilians from both countries.
• Traders are currently keeping an eye on US economic trends, featuring the release of the ISM Manufacturing PMI and JOLTS job numbers, for some stimulus ahead of other important macro data due early in the month. There is.

Technical Outlook: Gold Prices Look Poised for Further Rise While Resistance Between $2,625-$2,624 Turns Into Support

From a technical perspective, the appearance of buying near $2,625-$2,624 should serve as a key point as it reaffirms the support that features the resistance breakpoint of the short-term uptrend channel. Any follow-through selling could push gold to the $2,600 level, and a decisive break below could pave the way for significant downside in the short term. . XAU/USD could then fall to the intermediate support at $2,560 on its way to the $2,535-$2,530 region.

On the flip side, the $2,656-$2,657 horizontal zone could provide some resistance ahead of the $2,672 area and $2,685-$2,686 area, or the record peak touched last week. This is closely followed by the $2,700 mark, a break above which would provide another opening for bullish traders and set the stage for an extension of the multi-month uptrend.