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Gold Bulls Charge Ahead: Path to All-Time High in Sight

Gold All-Time High

Gold price approaches an all-time high amid geopolitical tensions and anticipation of Fed rate cuts, awaiting Powell’s testimony.

The price of gold (XAU/USD) inches closer to its historic peak as it soared to $2,141.8 per ounce yesterday, just shy of an all-time high. The surge, which started last Friday due to disappointing US economic data, has several driving factors. These include anticipating interest rate cuts by the Federal Reserve, heightened geopolitical tensions in regions like Ukraine and the Middle East, and central banks increasing their purchases as a hedge against the US dollar.

Market analysts suggest that the technical indicators for gold remain bullish, signaling further upward movement. Investors are closely eyeing Federal Reserve Chair Jerome Powell’s testimony before the House Financial Services Committee scheduled later today (15:00 UK time). Although analysts do not anticipate Powell to disclose specifics regarding interest rate cuts, market participants will closely scrutinize his comments on inflation and the US labor market for hints on future monetary policy decisions. Market analysts anticipate that the upcoming FOMC meeting on March 20th will offer a more suitable platform for discussions on official rate adjustments.

Gold Bulls Charge Ahead: Path to All-Time High in Sight

The gold chart reflects a positive trend, with previous resistance levels now turning into support zones. Notably, $2,081 per ounce has emerged as a significant support level, with $2,114 per ounce acting as a buffer in recent trading sessions. However, technical indicators such as the Commodity Channel Index (CCI) suggest that gold may be overbought, indicating a potential period of consolidation in the near term.

Retail trader data reveals a mixed sentiment among market participants, with 44.00% of traders net-long and a short-to-long ratio of 1.27 to 1. Contrarian analysis of this data suggests a bullish outlook for gold prices, as the number of traders’ net-short has increased, indicating a potential continuation of the upward trend.

Despite this, client sentiment remains divided, with 54% of clients net short. Daily statistics show a slight increase in long positions and a modest decrease in short positions. At the same time, weekly figures reflect a significant decrease in long positions and a substantial increase in short positions.

As the price of gold inches closer to its all-time high, market participants await further cues from Powell’s testimony and upcoming Fed meetings for potential triggers that could propel the precious metal to new record levels.

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