- Gold price ticks lower on Wednesday amid some profit-taking ahead of Fed Chair Powell’s statement.
- Rising bets for a June Fed rate cut undermine the USD and lend support to the metal.
- Geopolitical risks and China’s economic woes also act as a tailwind for the XAU/USD.
Gold price (XAU/USD) edges lower during the Asian session on Wednesday and reverses a part of the previous day's positive move back closer to the all-time high reached in December 2023. The downtick could be attributed to some profit-taking amid extremely overbought conditions on the daily chart and some repositioning trade ahead of the Federal Reserve (Fed) Chair Jerome Powell's congressional testimony. Investors will closely scrutinize Powell's remarks for fresh cues about the Fed's rate-cut path, which will play a key role in influencing the US Dollar (USD) price dynamics and provide a fresh directional impetus to the non-yielding yellow metal.
Apart from this, the release of the ADP report on private-sector employment and JOLTS Job Openings data might contribute to producing some meaningful trading opportunities around the Gold price ahead of the US Nonfarm Payrolls (NFP) on Friday. In the meantime, the growing market conviction that the Fed will start cutting interest rates at the June policy meeting might continue to act as a tailwind for the XAU/USD. This, along with concerns about a slowdown in China – the world's second-largest economy – and geopolitical tensions should help limit the downside for the safe-haven precious metal, warranting some caution for aggressive bearish traders.
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