• Gold extends its rally to all-time highs above $3,650 amid broad-based USD weakness.
• Investors' fears of a sharp downward revision of US jobs are hurting the Dollar on Tuesday.
• XAU/USD looks overstretched after rallying 10% in the last three weeks.

Gold keeps marching higher on Tuesday and has reached a fresh all-time high above $3,650. The pair, however, looks beyond overstretched after a 10% rally from August 20, with most timeframes heavily overbought, sending a severe warning for buyers.

The precious metal is drawing support from market expectations of a sharp cut in US employment figures at today’s BLS Benchmark Nonfarm Payrolls Revision, due later on the day. Market sources have flagged a slash of 800,000 jobs, which would add pressure on the Fed to cut rates by 50 basis points next week.

Technical Analysis: XAU/USD is at strongly overbought levels

A look at the 4-hour chart and we see all the ingredients for a downwards correction. The Relative Strength Index, near the 80 level and showing a bearish divergence, suggests that the pair might need to come down before rallying further.

To the upside, immediate resistance is at the intraday high of $3,658. Further up, the 265.8% retracement of the September 3-4 reversal, at the $3,690 area, might be a plausible target ahead of the $3,700 round level.

A bearish reversal from these levels is likely to find support at the intra-day low of $3.630 ahead of the September 8 low, at $3580 and the September 4 low, at $3,515.