Gold Price Slumps Further as US Dollar Rebounds

The recovery of the US Dollar Index (DXY) to near 104.30 has negatively impacted gold's appeal for investors. Additionally, the rise in 10-year US Treasury yields to 4.21% has increased the opportunity cost of holding non-yielding assets like gold.

Political developments in the US, including speculation about a potential Republican victory in the upcoming presidential elections, have further strengthened the US Dollar. This has been fueled by an assassination attempt on Donald Trump and rumors about President Joe Biden's possible withdrawal from the race due to health concerns.

Despite these factors, gold's near-term outlook remains positive as investors anticipate the Federal Reserve (Fed) will start cutting interest rates in September. This expectation has been supported by recent data indicating a resumption of the disinflation process and cooling labor market conditions.

Technical analysis shows that while the gold price has slipped below the crucial $2,450 level, the overall outlook remains bullish. The advancing trendline from the February 14 low at $1,984.30 is expected to provide support for gold bulls. However, the 14-day Relative Strength Index (RSI) has declined, suggesting a temporary stall in the upward momentum.