As buyers wait for a new catalyst for a new round of upward movement, gold prices have entered an upward consolidation phase above $2500. As tensions in the Middle East seem to ease, the focus of the market is now shifting towards moderate levels of housing and confidence data in the United States.

Gold prices encountered resistance again near $2530 on Monday, and fell back during the Asian trading session on Tuesday (August 27th). Spot gold is currently trading around $2514.70 per ounce. Concerns about the broader Middle East conflict seem to have eased, putting pressure on traditional safe haven gold, even though the US dollar and bond yields have dragged down overnight gains.

US Air Force General and Chairman of the Joint Chiefs of Staff, Brown, stated earlier on Tuesday that there has been no further escalation following the exchange of fire between Israel and Hezbollah in Lebanon, and concerns about the broader Middle East conflict in recent times have subsided.

Previously, Israel launched a preemptive airstrike on Hezbollah in southern Lebanon on Sunday. It is reported that Hezbollah has launched large-scale missile and rocket attacks on northern and central Israel, targeting the Israeli spy agency Mossad.

At the same time, durable goods orders in the United States were strong in July, jumping 9.9%, exceeding expectations of 4.0%, causing traders to frantically short cover the US dollar. The encouraging US data eased expectations that the Federal Reserve may cut interest rates by 50 basis points in September, helping the US dollar rebound from its annual trough.

The Chicago Mercantile Exchange's (CME) Federal Reserve Watch tool showed on Tuesday that the market currently expects a 28% likelihood of a 50 basis point rate cut in September, while the likelihood of a 25 basis point rate cut jumps to 72%.

The next direction for gold prices seems to be heading north, as the Federal Reserve's interest rate cut bet increases and geopolitical risks in the Middle East continue to support gold prices. In addition, the improved demand for physical gold in Asian countries may limit the downward space for gold prices.

Sachin Jain, CEO of the World Gold Council (WGC) India business, said, "The main beneficiaries of the tariff reduction will be retail consumers." He said that demand will be very strong during the upcoming holiday season.

According to reports, industry officials have stated that as consumers adapt to the rise in gold prices, gold demand in major Asian countries is expected to improve in the coming months, and economic uncertainty and currency weakness concerns will drive investment flows.

Looking ahead, gold traders will look for clues from the upcoming release of the US Consumer Confidence Index and housing data, while the speeches of Federal Reserve policy makers will also be closely monitored for new policy implications.

Gold buyers need to recapture the historical high near $2532 in order to break through the next key barrier of $2550, and acceptance above the latter may challenge the $2600 mark.

Daily chart of spot gold