Gold prices have recovered to $2,404, marking a 0.33% increase, driven by a decline in US Treasury bond yields and a weaker US dollar. This rebound comes after a four-day losing streak for the precious metal.

Market participants are closely monitoring a busy US economic docket this week, which includes the release of June’s inflation data and the preliminary reading of the Gross Domestic Product (GDP) for the second quarter of 2024. These data points are crucial in shaping expectations for the Federal Reserve’s monetary policy decisions.

A recent Reuters poll reveals that a majority of economists expect the Fed to cut interest rates by 50 basis points (bps) in 2024, with the first 25 bps cut anticipated in September. This expectation has been fueled by recent CPI data indicating continued disinflation in the US.

Additional factors supporting gold prices include India’s recent decision to slash import taxes on gold and silver, which is expected to boost retail demand.

From a technical analysis perspective, gold prices have formed a bullish harami pattern, suggesting a potential continuation of the uptrend. The Relative Strength Index (RSI) is currently in bullish territory, indicating growing buying momentum.

If XAU/USD can break above Monday’s high of $2,412, it could pave the way for further gains towards $2,450 and potentially challenge the all-time high of $2,483. However, a drop below the July 22 low of $2,384 could trigger a deeper correction, with potential support levels at the 50-day and 100-day SMAs.