Gold price flat lines above $2,300 mark, looks to US macro data for fresh impetus

• Gold price lacks follow-through buying and is undermined by a combination of negative factors. 
• Easing geopolitical tensions, along with renewed USD buying, act as a headwind for the commodity.
• Traders now look to important US macro data for Fed rate cut cues and fresh directional impetus.

Gold price (XAU/USD) struggles to capitalize on the previous day’s bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday. The global risk sentiment remains supported by easing concerns about a further escalation of geopolitical tensions in the Middle East. This, along with the emergence of some US Dollar (USD) dip-buying, bolstered by hawkish Federal Reserve (Fed) expectations, acts as a headwind for the non-yielding yellow metal.

The current market pricing indicates that the US central bank will begin its rate-cutting cycle only in September amid still sticky inflation. This remains supportive of elevated US Treasury bond yields, which helps revive the USD demand and caps the upside for the Gold price. Traders, however, might prefer to wait for this week’s key US macro data – the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index – for cues about the Fed’s rate cut path before placing fresh directional bets around the XAU/USD.

In the meantime, Wednesday’s release of US Durable Goods Orders might influence the USD price dynamics and produce short-term trading opportunities around the Gold price. The price action, meanwhile, makes it prudent to wait for a sustained break and acceptance below the $2,300 mark before positioning for an extension of the precious metal’s recent pullback from the all-time peak touched earlier this month. 

Daily Digest Market Movers: Gold price struggles to lure buyers amid positive risk tone, modest USD strength

• Easing concerns over geopolitical tensions in the Middle East remain supportive of a generally positive risk tone and continue to act as a headwind for the safe-haven Gold price. 
• Hawkish comments from Federal Reserve officials lifted bets that the US central bank will keep rates higher for longer and further undermined the non-yielding yellow metal. 
• The weaker US PMI prints released on Tuesday keep the US Dollar bulls on the defensive near a one-and-half-week low, which is seen lending some support to the commodity.
• The S&P Global Composite Purchasing Managers Index (PMI) fell to 50.9 in April’s flash estimate, suggesting that the business activity in the US private sector expanded at a slower pace. 
• Meanwhile, the S&P Global Manufacturing PMI unexpectedly dropped into the contraction territory in April, while the gauge for the services sector declined to 50.9 from 51.7 in March.
• Traders also prefer to wait on the sidelines ahead of this week’s key US macro data, which might influence the Fed’s future policy decision and provide a fresh impetus to the XAU/USD. 
• Wednesday’s US economic docket features Durable Goods Orders, though the focus remains on the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

Technical Analysis: Gold price could accelerate the downfall once the $2,300 pivotal support is broken decisively

From a technical perspective, the XAU/USD showed some resilience below the 23.6% Fibonacci retracement level of the February-April rally. The subsequent bounce, along with the fact that oscillators on the daily chart are still holding in the positive territory, warrants some caution for bearish traders. Hence, it will be prudent to wait for acceptance below the $2,300 mark before positioning for deeper losses. The Gold price might then slide to the $2,260-2,255 area, or the 38.2% Fibo. level, en route to the $2,225 intermediate support and the $2,200-2,190 confluence, comprising the 50% Fibo. level and the 50-day Simple Moving Average (SMA). 

On the flip side, any further move up is more likely to confront stiff resistance and remain capped near the $2,350-2,355 region. The next relevant hurdle is pegged near the $2,380 supply zone, which is followed by the $2,400 mark and the all-time peak, near the $2,431-2,432 area. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent blowout rally witnessed over the past two months or so.