Investing.com -- Gold currently looks "tactically overbought" following a recent jump to record highs in the price of the yellow metal, according to analysts at Bank of America.
Spot gold rose 0.7% to $2,674.56 an ounce, while gold futures expiring in December climbed by 0.5% to $2,697.60 an ounce by 06:57 ET (10:57 GMT).
Underpinning the increase has been a jumbo 50-basis point interest rate cut by the Federal Reserve last week, as well as bets that the central bank will roll out further reductions this year.
However, in a note to clients, the Bank of America analysts said that even though gold prices are well above their 200-day moving average, returns are historically "flat 1-6 months after trading at such extremes."
"Gold investors are also already discounting 150-200 [basis points] of interest rate cuts on our estimation. If Fed cuts are slower than expected, the pace of gold gains could also slow," the Bank of America analysts wrote.
"Nevertheless, support for prices is clear."
Investors are now focused on an upcoming address by Fed Chair Jerome Powell on Thursday, while key U.S. economic readings also loomed.
Powell will deliver pre-recorded remarks at the US Treasury Market Conference in New York at 09:20, according to the Fed's website.
Following the outsized rate cut last week, Powell said the move was a part of a "recalibration" of policy designed to protect the US labor market while sustainably bringing inflation back down to the Fed's stated 2% target.
Several other policymakers have defended the big drawdown this week, including Fed Governor Adriana Kugler, who said on Wednesday that the rate-setting Federal Open Market Committee needs to "balance its focus" between supressing price pressures and avoiding "pain" in the broader economy.
But Fed officials have not been unanimous in their support of the size of the cut. Fed Governor Michelle Bowman, who voted for lowering borrowing costs by a more traditional 25 basis points, has said she remains worried by lingering inflation risks.