Gold price pulls back after touching fresh record high, bullish potential seems intact

• Gold price climbs to a fresh all-time high amid growing September Fed rate cut bets.
• Tuesday’s upbeat US Retail Sales data underpins the USD and caps the XAU/USD.
• The risk-on mood further warrants caution before positioning for additional gains.

Gold price (XAU/USD) struggles to capitalize on its Asian session positive move to a fresh record peak, around the $2,482-2,483 area and currently trades with modest intraday gains. A modest US Dollar (USD) uptick prompts traders to take some profits off the table amid a slightly overbought Relative Strength Index (RSI) on the daily chart. Apart from this, the prevalent risk-on environment – as depicted by an extension of the uptrend across the global equity markets – contributes to the modest intraday pullback. 

Any meaningful corrective decline for the Gold price, however, still seems elusive in the wake of growing acceptance that the Federal Reserve (Fed) will begin its rate-cutting cycle in September. The expectations keep the US Treasury bond yields depressed near a multi-month low, which should cap the USD and continue to act as a tailwind for the non-yielding yellow metal. Hence, it will be prudent to wait for strong follow-through selling before confirming that the XAU/USD has formed a near-term top and placing bearish bets. 

Daily Digest Market Movers: Gold price witnesses some profit-taking, dovish Fed expectations to limit the downside

• The recent comments by Federal Reserve officials reaffirmed expectations of an interest rate cut in September, which continues to drive flows toward the non-yielding Gold price. 
• Fed Chair Jerome Powell said on Monday that inflation readings during the second quarter showed more progress was being made on bringing the pace of price increases to the target.
• San Francisco Fed President Mary Daly showed growing confidence that inflation is heading toward the central bank's goal and added that she expects a policy adjustment at some point.
• Fed Governor Adriana Kugler noted on Tuesday that downside risks to employment have become more balanced, and continued labor market rebalancing suggests inflation will move toward the target.
• Kugler further added that it would be appropriate to begin easing monetary policy later this year if economic conditions continue to evolve favorably and if the labor market cools too much.
• Traders are now pricing in multiple rate cuts by year-end, dragging the yield on the benchmark 10-year US government bond and the rate-sensitive 2-year Treasury yield to a multi-month low.
• Meanwhile, the US Dollar draws support from Tuesday's upbeat US Retail Sales data, which pointed to consumer resilience and bolstered economic growth prospects for the second quarter.
• The Census Bureau reported Retail Sales in the US remained unchanged in June and the previous month's revised higher to show a growth of 0.3% as compared to the 0.1% reported originally. 
• This, along with an extension of a bullish run across the global equity markets, might hold back traders from placing fresh bullish bets around the safe-haven XAU/USD and cap gains.

Technical Analysis: Gold price is likely to attract dip-buying near $2,430-2,425 resistance breakpoint, now turned support

From a technical perspective, the overnight sustained breakout through the $2,425-2,430 supply zone and a subsequent move beyond the $2,450 area, or the previous all-time peak, could be seen as a fresh trigger for bullish traders. That said, oscillators on the daily chart have just started moving in overbought territory and warrant some caution before positioning for additional gains. Hence, any further move-up is more likely to face some resistance and pause near the $2,500 psychological mark. 

On the flip side, any meaningful slide below the $2,450 area might now be seen as a buying opportunity and remain limited near the $2,430-2,425 resistance breakpoint, now turned support. A convincing break below the latter, however, might prompt some technical selling and drag the Gold price to the $2,400 mark. Some follow-through selling below the $2,390 area could pave the way for deeper losses toward testing the next relevant support near the $2,360 region.