Gold prices are consolidating near record highs, influenced by ongoing US-China trade tensions that are bolstering safe-haven demand. Concerns regarding a potential US recession, coupled with expectations of Federal Reserve rate cuts and a weaker US Dollar, are providing further support to XAU/USD. However, improved risk appetite may limit gains, given slightly overbought conditions indicated by the daily Relative Strength Index (RSI). The current consolidation phase around $3,230, just below the recent all-time high, suggests a temporary pause in bullish momentum. While technical indicators suggest a potential pullback, underlying fundamental factors continue to favor upward price movement for gold. Despite a temporary tariff reprieve, escalating trade disputes between the US and China are sustaining investor uncertainty. Concurrently, declining US bond yields are fueling concerns about the US economic outlook. Recent data indicating a slowdown in US inflation has reinforced expectations of renewed monetary easing by the Federal Reserve, with projections of multiple rate cuts this year. This anticipated policy shift has contributed to a significant decline in the US Dollar, further benefiting the non-yielding gold asset.
