XAU/USD down but not out amid triangle breakout, dovish Fed bets

• Gold price trades close to record highs near $2,500 early Monday.
• The US Dollar sees fresh selling amid risk appetite, sluggish US Treasury bond yields.
• Dovish Fed bets heighten ahead of Chair Jerome Powell’s speech and FOMC Minutes.
• Gold price charted a symmetrical triangle breakout on Friday, with upside bias still intact.

Gold price is battling $2,500 early Monday, having refreshed all-time highs at $2,510. Gold traders prefer to take profits off the table, repositioning before the key US Federal Reserve (Fed) Minutes of the July meeting and Chairman Jereme Powell’s speech later this week.

Gold price eases, but bullish bias still intact

Gold price witnessed a steep rise during the second half of Friday’s trading, gaining as much as 3% on the week.

The Gold price rally was mainly backed by heightened expectations of a Fed rate cut in September, as traders turned their attention to the upcoming week’s Jackson Hole Symposium, where Fed Chair Jerome Powell could throw fresh hints on additional easing beyond September.

Dovish comments from Chicago Fed President Austan Goolsbee warned that officials should be wary of keeping the restrictive policy in place longer than necessary.

In light of the dovish Fed expectations, Gold price rallied to a fresh record high of $2,509 on Friday, further supported by rife tensions in the Middle East. An imminent Iranian attack on Israel loomed, as Hamas mulled over ceasefire talks with the latter.

In Monday’s trading so far, Gold buyers appear to have taken a breather, consolidating Friday’s upsurge while finding fresh haven demand after Hamas rejected the latest US proposal for Gaza hostage and ceasefire deal on Sunday. Iran-backed militant group, Hamas, blamed Israeli Prime Minister Benjamin Netanyahu for putting up new obstacles in the talks, as cited by The Times of Israel.

Amid renewed geopolitical tensions, the Gold price retracement remains limited, also as technical indicators on the daily time frame indicate more upside is likely in the near term.

Gold price technical analysis: Daily chart

Gold price closed Friday above the upper boundary of a symmetrical triangle formation, then at $2,470, confirming an upside break of the symmetrical triangle formation.

The 14-day Relative Strength Index (RSI) is easing off higher levels but remains well above the 50 level, suggesting that the Gold price remains a ‘buy-the-dip’ trade.

If the new record high of $2,510 is reclaimed on a sustained basis, the next relevant topside target is seen at the $2,550 level. Acceptance above the latter could challenge the $2,600 round level en route to the triangle target, measured at $2,660.

In case the Gold price pullback gathers traction, the immediate support is seen around the $2,480 static resistance, below which the triangle resistance-turned-support, now at $2,467 will be tested.

Further south, the $2,450 support will come into play.