Gold Price Forecast: XAU/USD flirts with record highs near $2,150, more upside likely?

• Gold price is consolidating near all-time highs of $2,152 early Thursday.
• Dollar licks its wounds with Treasury yields, as markets look to more Powell, US jobs data.
• Overbought RSI conditions on the daily chart continue to warrant caution for Gold buyers.

Gold price is sitting at its lifetime high near $2,150, awaiting fresh catalysts for the next directional impetus. Gold buyers retain control amid sustained weakness in the US Dollar and the US Treasury bond yields, in the face of increased bets for a US Federal Reserve (Fed) interest rates cut in June.  

Gold price rally stalls before more Jerome Powell

The US Dollar remained under pressure alongside the US Treasury bond yields on Wednesday, following the releases of the downbeat US ADP Employment Change data and the JOLTS Job Openings report.

The US private sector added 140,000 jobs in February, an increase from the upwardly revised 111,000 in January but a bit below the expected 150,000 additions, ADP reported on Wednesday.

The number of job openings on the last business day of January stood at 8.86 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Wednesday. The data followed 8.88 million (revised from 9.02 million) openings in December and came in slightly below the market forecast of 8.9 million.

The pain in the Greenback deepened after US Federal Reserve Chair Jerome Powell’s testimony before the House Financial Services Committee. Powell said that interest rate cuts are still likely in the coming months if they are more confident that there is further evidence of falling inflation.

Soft language from Fed Chair Powell affirmed the market expectations of the Fed’s policy pivot in the second half of this year. Markets are currently pricing in about a 70% chance that the Fed could begin easing rates in June, slightly higher than a 63% probability seen a day ago, according to the CME FedWatch Tool.

Loosening US labor market conditions combined with Powell’s comments helped Gold price clinch a fresh all-time high, although it was just a grind higher.

However, it remains to be seen if the Gold price stretches further toward the $2,200 mark, as investors could resort to profit-taking after the recent upsurge and ahead of Friday’s all-important NFP data release from the United States, which could confirm the timing of the Fed rate cut as early as June.

Also, in focus will be on the second day of Powell’s testimony before the Senate Banking Committee later in the day. The weekly US Jobless Claims data will also offer fresh cues on the country’s labor market, impacting the value of the US Dollar and Gold price.

Gold price technical analysis: Daily chart

As observed on the daily chart, Gold price is holding firmer near $2,150, consolidating the recent rally to record highs.

The overbought conditions on the 14-day Relative Strength Index (RSI) continue to warrant caution for Gold buyers.

In case a correction sets in, Gold price could find immediate support at $2,124, the previous day’s low.

The next downside cap is seen near $2,111, the confluence of Tuesday’s low and the 23.6% Fibonacci Retracement (Fibo) level of the recent rally from the February 14 low of $1,984 to the all-time high of $2,152.

A sustained break below that level could help Gold sellers flex their muscles toward the $2,100 threshold.  

However, any retracement in Gold price could be seen as a good dip-buying opportunity, as the 21-day Simple Moving Average (SMA) and the 50-day SMA Bull Cross remains in play.

Gold buyers need to take out the new record high at $2,152 on a sustained basis to unleash further upside toward the $2,200 threshold. Ahead of that, the $2,180 resistance could challenge bearish commitments.