Gold price (XAU/USD) retreats after touching a fresh record high earlier this Monday and trades with a mild negative bias around the $3,220 area during the first half of the European session.

A positive tone around the equity markets prompts some profit-taking around the precious metal amid slightly overbought conditions on the daily chart.

Any meaningful corrective decline, however, still seems elusive in the wake of a sharp escalation in US-China trade tensions, which might continue to act as a tailwind for the safe-haven bullion.

Meanwhile, investors now seem convinced that the Federal Reserve (Fed) will resume its rate-cutting cycle soon and lower borrowing costs at least three times this year amid worries about a tariffs-driven US economic slowdown.

This keeps the US Dollar (USD) depressed near its lowest level since April 2022 and should contribute to limiting the downside for the non-yielding Gold price. Hence, any subsequent slide might still be seen as a buying opportunity and is more likely to remain limited, warranting caution for bearish traders.

Source: FXStreet