This is not the same Gold market as just a few short months ago, TDS senior commodity strategist Daniel Ghali notes.

Scope for further gains is limited

“Discretionary traders continue to hold a larger position than warranted by the rates market outlook for Fed cuts, which are arguably somewhat rich. CTAs now effectively hold a 'max long' position size, suggesting little scope to add without a re-leveraging process.”

“While we expect central bank buying activity to persist, Asia remains on a buyer's strike with only nascent signs of a bid over the last sessions. After all, price action in Asian currencies has diminished the appetite for precious metals as a currency depreciation hedge.”

“A safe-haven bid associated with Middle Eastern geopolitical risks may be supporting prices, but the scope for further gains is limited by positioning dynamics for the time being without a more significant escalation or a deepening outlook for Federal Reserve cuts.”