GOLD PRICE DRIFTS LOWER AHEAD OF US PCE PRICE INDEX, HOLDS ABOVE $2,300 MARK

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  • Gold price struggles to capitalize on the overnight strong bounce from a two-week low.
  • Fed rate cut uncertainty helps limit the USD corrective slide and caps gains for the metal.
  • Traders also seem reluctant to place aggressive bets ahead of the key US PCE Price Index.

Gold price (XAU/USD) registered strong gains of over 1% on Thursday and snapped a two-day losing streak to a two-week low touched the previous day. Softer US macro data released on Thursday suggested that growth momentum in the world's largest economy is moderating. This comes on top of signs of easing inflationary pressures and reaffirms market expectations that the Federal Reserve (Fed) will start cutting interest rates. This led to the overnight downfall in the US Treasury bond yields this year, which triggered the US Dollar (USD) corrective slide from its highest level since early May and benefited the precious metal. 

Apart from this, geopolitical tensions in the Middle East and the protracted Russia-Ukraine war provided an additional lift to the safe-haven Gold price. The upside for the XAU/USD, however, remains capped as bulls seem reluctant to place aggressive bets and prefer to wait for more cues about the Fed's rate-cut path. Hence, the spotlight remains on the US Personal Consumption Expenditures (PCE) Price Index, due later during the North American session. The crucial US inflation data will influence expectations about the Fed's future policy decision and determine the near-term trajectory for the non-yielding yellow metal. 


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