Market Data 
- Gold price attracts some sellers on Tuesday, largely ignoring a combination of supporting factors.
- Fed rate cut bets drag the USD to a nearly two-month low, but does little to lure XAU/USD bulls.
- Traders now look forward to this week’s important US macro data and key central bank event risks.
Gold price (XAU/USD) meets with a fresh supply during the Asian session on Tuesday and erodes a part of the previous day’s recovery gains from the $2,315-$2,314 area, or over a three-week low. The downside, however, seems cushioned in the wake of firming expectations that the Federal Reserve (Fed) will cut interest rates later this year, bolstered by disappointing US macro data on Monday. This, in turn, drags the US Dollar (USD) to a near two-month low and should continue to act as a tailwind for the non-yielding yellow metal.
Apart from this, persistent geopolitical risks validate the near-term positive outlook for the Gold price and support prospects for further appreciation. Hence, any subsequent decline might be seen as a buying opportunity and is more likely to remain limited. Traders might also prefer to wait on the sidelines ahead of other important US macro releases this week, including the Nonfarm Payrolls (NFP) report on Friday. Apart from this, key central bank event risks – the Bank of Canada (BoC) decision on Wednesday and the European Central Bank (ECB) meeting on Thursday – could provide some impetus to the XAU/USD and help determine the near-term trajectory.
Daily Digest Market Movers: Gold price fails to attract follow-through buying despite Fed rate cut bets
- Signs of easing inflationary pressures and slowing economic growth lifted bets for an imminent rate cut by the Federal Reserve this year, which should continue to drive flows towards the non-yielding Gold price.
- The US Bureau of Economic Analysis (BEA) reported on Friday that the Personal Consumption Expenditures (PCE) Price Index held steady at 2.7% and the core gauge rose 2.8% on a yearly basis, matching expectations.
- Data published on Monday showed that the US Institute for Supply Management’s (ISM) Manufacturing PMI fell to 48.7 in May from the 49.2 previous, led by a slump in new goods orders by the most in nearly two years.
- This, in turn, triggered a fresh leg down in the US Treasury bond yields, dragging yields on the rate-sensitive two-year US government bond and the benchmark 10-year note to their lowest level since May 21.
- The US Dollar slides to its lowest level since April 10, which, along with geopolitical tensions in the Middle East, could offer additional support to the safe-haven XAU/USD and support prospects for some upside.
- Traders now look forward to the US economic docket, featuring the release of JOLTS Job Openings and Factory Orders data for short-term opportunities later during the early North American session this Tuesday.
- The attention will then turn to the US ADP report on private-sector employment scheduled on Wednesday, which will be followed by the official jobs data, popularly known as the Nonfarm Payrolls (NFP) report on Friday
- Apart from this, investors this week will take cues from key central bank event risks – the Bank of Canada (BoC) decision on Wednesday and the highly-anticipated European Central Bank (ECB) meeting on Thursday.
Technical Analysis: Gold price manages to hold above 50-day SMA pivotal support near $2,334 region
From a technical perspective, the $2,360 region (Friday’s swing high) is likely to act as an immediate hurdle ahead of the $2,364 level. Some follow-through buying beyond the latter will be seen as a fresh trigger for bullish traders and lift the Gold price towards the $2,385 intermediate hurdle en route to the $2,400 mark. The momentum could extend to the $2,425 zone en route to the $2,450 region or the all-time peak touched in May.
On the flip side, the 50-day Simple Moving Average (SMA), currently pegged near the $2,334 area, should act as immediate support ahead of the $2,325 horizontal zone and the overnight swing low, around the $2,315-2,314 region. Given that oscillators on the daily chart have just started gaining negative traction, a convincing break below should pave the way for deeper losses. The Gold price might then weaken further below the $2,300 mark and decline further towards testing the next relevant support near the $2,285-$2,284 region.
