Article by: ETO Markets

After the recent unrelenting surge, which was supported by increased expectations of aggressive interest rate reduction from the US Federal Reserve in the face of a string of weak US economic data that stoked fears of a "soft-landing," gold purchasers took a break. Markets are currently pricing in a roughly 63% likelihood that the Fed might start easing rates in June, which is marginally less than the 67% probability observed at the beginning of the week.

Given that the Relative Strength Index is extremely overbought, a significant correction to the downside may be imminent. The $… support area will be crucial to maintain if that occurs. This level is the 23.6% Fibonacci Retracement of the most recent rally. Acceptance below the latter is probably going to set off another decline into the $… which 38.2% Fibonacci support level locates.

The 20-DMA and the 50-DMA bull cross confirmation, however, could protect against further losses.
To release more upside toward the $… barrier, gold buyers must consistently reclaim the record high of $...