As traders seek clarity on the likely timing of Federal Reserve rate cuts before opening new directional positions, the precious metal is confined within a familiar trading range that has existed for the past one and a half weeks. At the end of the June monetary policy meeting, the US Central Bank took a more aggressive stance, forecasting only one rate cut this year. However, amid signs of easing inflation in the US, there is a possibility of two rate cuts in 2024. Moreover, weaker US retail sales data released on Tuesday indicated signs of fatigue among American consumers, increasing the likelihood of the first Fed rate cut in September and another in December.

From a technical perspective, bulls need to wait for a sustained move beyond the 50-day simple moving average (SMA), currently around the $1,344–1,345 region, before opening new long positions. Subsequent upward movement could lift gold prices beyond the supply zone at $1,360 towards an intermediate obstacle around $1,388, en route to the $1,400 mark. Sustained growth above this level would negate any short-term negative forecasts and allow the XAU/USD pair to revisit and retest the historical high reached in May.

On the downside, the round level of $1,300 provides immediate support before horizontal support at $1,285. A convincing break below the latter would pave the way for a resumption of the recent pullback from the record high, dragging gold prices towards the next significant support area at $1,250. The downward trajectory could continue to the $1,220 level before ultimately bringing the commodity down to the round level of $1,200.