Gold Price Rally Persists Despite Overbought Conditions
The gold price continues its upward trend on Monday, reaching its highest levels since mid-May. The precious metal is being supported by fading expectations of an imminent interest rate hike by the Federal Reserve and lower US Treasury bond yields. Geopolitical tensions surrounding Iran are also sustaining demand for safe-haven assets, although this support is tempered by a strong US dollar.
The daily chart shows XAU/USD trading at $4,647.02, with prices well above the 100-day and 200-day simple moving averages. The reclaim of the downward trendline around $4,389.60 reinforces the bullish near-term bias. However, the Relative Strength Index (RSI) is at 72.03, indicating overbought conditions and a potential corrective pause.
On the topside, resistance is seen at $4,773.00 and $4,890.00. On the downside, support emerges from the 200-day SMA at $4,516.92, with the former trendline region and 100-day SMA forming a deeper demand zone.