Gold Daily | Gold Hits Historic $3,500 High on Fed Rate Cut Expectations and Geopolitical Tensions

【Latest Gold Price and Recent Trends】

The international gold price surged past $3,500 on Tuesday, marking a historic high as market expectations for a Federal Reserve rate cut grew. This year, gold has risen by 32%.

【Technical Analysis】

On the daily chart, gold has broken out of a four-month consolidation range, suggesting the potential for further bullish movement. The Relative Strength Index (RSI) indicates room for more upside despite entering the overbought zone. On shorter-term charts, upward trend lines define current bullish momentum, with resistance seen at $3,509 and potential targets at $3,550.

【Market Sentiment and Economic Background】

Gold's recent rally is driven by expectations of a Fed rate cut and geopolitical tensions, notably between Russia and Ukraine. There's an 89% probability of a rate cut at the Fed's September meeting, according to CME FedWatch. Inflation concerns persist as indicated by July's PCE data. Political pressure from President Trump on the Fed and geopolitical risks are boosting gold's appeal. Trade tensions and shifts in global asset holdings, such as India and China's reduction in US debt, are supporting gold demand.

【Analyst Opinions】

Analysts anticipate further gains in gold supported by low interest rates and geopolitical risks. UBS strategist Joni Teves predicts ongoing highs in gold prices in coming quarters, highlighting its role in portfolio diversification. OCBC strategist Christopher Wong notes market anticipation for sustained prices above $3,500, driven by geopolitical and policy uncertainties. Meanwhile, BMO analysts foresee potential net inflows into gold ETFs, further boosting prices.