• Gold price remains well supported by bets for an imminent Fed rate cut later this year.
• The prevalent risk-on environment keeps a lid on any further gains for the XAU/USD.
• Thursday’s sustained breakout through the $2,040-2,042 hurdle favours bullish traders.

Gold price (XAU/USD) holds steady around the $2,045 region during the Asian session on Friday and remains well within the striking distance of a nearly one-month peak touched the previous day. The US Personal Consumption Expenditures (PCE) Price Index released on Thursday showed that annual inflation in January was the lowest in three years, opening the door for an eventual interest rate cut by the Federal Reserve (Fed). This fails to assist the US Dollar (USD) to build on the overnight solid rebound from a technically significant 200-day SMA and turns out to be a key factor acting as a tailwind for the precious metal.

That said, comments by a slew of influential FOMC members suggest that the US central bank was in no hurry to cut interest rates. Moreover, investors seem convinced that the Fed will wait until the June policy meeting before lowering borrowing costs. This, in turn, remains supportive of elevated US Treasury bond yields and caps the upside for the non-yielding Gold price. Apart from this, the prevalent strong bullish sentiment across the global equity markets is seen as another factor holding back traders from placing fresh bullish bets around the safe-haven XAU/USD, warranting caution before positioning for further gains.