Gold price hits a new record high above $2,300

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Gold price hits a new record high above $2,300 in Asian trading on Thursday.
Revival of June Fed rate cut expectations smashed the US Dollar and the US Treasury bond yields on Wednesday.
Highly overbought RSI conditions continue to warrant caution for Gold buyers.
More Fedspeak and US employment data are next in focus for fresh trading impetus.
Gold price is flirting with $2,300 after refreshing a lifetime high at $2,305 earlier this Thursday. Persistent US Dollar (USD) softness alongside and the extended retreat in the US Treasury bond yields keep pushing Gold price through the roof.

Gold price extends its record-setting rally

Expectations of a dovish policy pivot by the US Federal Reserve (Fed) this year regained momentum on Wednesday after US ISM Services PMI and the Price Paid sub-index dropped to 51.4 and 53.4 in March respectively and smashed the US Treasury bond yields across the curve. Markets cheered the renewed optimism and added to the US Dollar downfall, which was fuelled by sliding US Treasury bond yields.


The Greenback suffered more after Fed Chair Jerome Powell reassured of the likelihood of interest rate cuts this year, during his appearance at the Stanford Graduate School of Business on Wednesday. Powell said that "if the economy evolves broadly as we expect," he and his Fed colleagues largely agree that a lower policy interest rate will be appropriate "at some point this year." Amidst renewed dovish Fed expectations, Gold price gathered strength and tested the $2,300 threshold.

On Thursday, Asian traders hit their desks and reacted positively to Fed policymakers’ dovish remarks, triggering a fresh leg up in the Gold price to a new record high. Federal Reserve (Fed) Governor Adriana Kugler said that she expects the disinflation trend will continue, which will pave the way for the central bank to cut interest rates.

However, it remains to be seen if Gold price sustained the upside, as the technical picture shows that the bright metal is highly overbought. Traders could resort to profit-taking on Gold longs, adjusting their positions ahead of Friday’s US Nonfarm Payrolls data release.

If geopolitical tensions in the Middle East resurface, it could once again act as a tailwind for the Gold price upsurge. Meanwhile, Gold price will remain at the mercy of more commentary from Fed officials and the US weekly Jobless Claims data, which could offer fresh cues on the market’s pricing of a June Fed rate cut (currently standing at 62%).