GOLD PRICE HANGS NEAR TWO-MONTH LOW, BEARS NOT READY TO GIVE UP YET

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  • Gold price remains confined in a range just above a two-month low touched on Wednesday.
  • Delayed Fed rate cut bets underpin the USD and act as a headwind for the non-yielding metal.
  • Geopolitical tensions in the Middle East help to limit the downside for the safe-haven XAU/USD.

Gold price (XAU/USD) extends its sideways consolidative price move during the Asian session on Thursday and is currently placed just above a two-month low touched the previous day. The hotter-than-expected US inflation data released on Tuesday pushed back expectations for the first interest rate cut by the Federal Reserve (Fed) to the middle of the year and continues to act as a headwind for the non-yielding yellow metal. Meanwhile, hawkish Fed expectations assist the US Dollar (USD) to stall the overnight pullback from its highest level since November 14 and is seen as another factor undermining the commodity.

That said, a further decline in the US Treasury bond yields holds back the USD bulls from placing fresh bets. This, along with the risk of a further escalation of geopolitical tensions, helps limit the downside for the safe-haven Gold price. Meanwhile, the lack of meaningful buying interest and the post-US CPI breakdown through a short-term trading range suggests that the path of least resistance for the XAU/USD remains to the downside. Hence, any attempted recovery might be seen as a selling opportunity and runs the risk of fizzling out rather quickly as traders now look to the US macroeconomic data for a fresh impetus


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