Gold price pulls back sharply from record highs, back below $2,100

Gold price is paring back gains below $2,100, reversing sharply from the all-time-high of $2,144 in Asian trading on Monday. Gold price rocketed amid rife speculation that the Fed is set to cut interest rates as early as March next year. Gold price also benefited from fresh geopolitical concerns. 

From a technical perspective, any subsequent move-up is likely to face some resistance near the $2,052 area, or a multi-month peak. With oscillators on the daily chart holding comfortably in the positive territory, some follow-through buying will be seen as a fresh trigger for bullish traders and allow the Gold price to accelerate the momentum further towards challenging the all-time high, around the $2,079-2,080 zone touched in May.

On the flip side, the overnight swing low, around the $2,030 area, could act as immediate support ahead of the $2,020 zone and the $2,010-$2,008 strong horizontal resistance breakpoint. The latter should act as a key pivotal point, which if broken might prompt some technical selling and drag the Gold price further below the $2,000 psychological mark, towards testing the next relevant support near the $1,990 region.

Fundamental Overview

Gold price (XAU/USD) sticks to its modest intraday gains through the early European session and has now reversed a major part of the previous day's losses. The precious metal remains well within the striking distance of its highest level since May 5 touched on Wednesday and currently trades around the $2,043-$2044 area, up nearly 0.40% for the day. Growing acceptance that the Federal Reserve (Fed) is done with its policy-tightening campaign and may start cutting rates as early as March 2024 turns out to be a key factor acting as a tailwind for the non-yielding yellow metal.

Dovish Fed expectations, meanwhile, fail to assist the US Dollar (USD) to capitalize on this week's goodish recovery from its lowest level since August 11. Subdued USD price action lends additional support to the Gold price amid China's economic woes and a darkening global outlook. That said, a generally positive tone around the European equity markets might cap gains for the safe-haven XAU/USD. Furthermore, a duo of Fed officials on Thursday pushed back against expectations for a quick pivot to rate cuts and might further hold back bulls from placing fresh bets. 

Nevertheless, the Gold price remains on track to end in the green for the third successive week as trades now look to the US ISM Manufacturing PMI, due for release later during the early North American session, for a fresh impetus. The focus, however, will remain glued to Fed Chair Jerome Powell's speech, which might provide some cues about future interest rates and infuse some volatility in the markets. This, along with the USD price dynamics, should provide impetus to the XAU/USD and allow traders to grab short-term opportunities on the last day of the week.