Gold price extends its consolidative price move despite softer USD and cautious market mood.

Gold price attracts some dip-buying on Monday amid a modest US Dollar downtick.Geopolitical tensions and looming recession risks also benefit the safe-haven metal.The prevalent risk-on environment is seen acting as headwind and capping gains.

Gold price (XAU/USD) attracts some dip-buying on the first day of a new week and reverses a part of Friday’s downfall from the vicinity of the $2,050 area. The uptick, however, lacks a bullish conviction as traders now look to the key US inflation reading – the core PCE Price Index – for cues about the timing of when the Federal Reserve (Fed) will begin easing its policy. This, in turn, will help determine the next leg of a directional move for the non-yielding yellow metal.

Meanwhile, the Fed last week signalled an end to its monetary policy tightening cycle and pencilled in a cumulative of 75 basis points (bps) rate cuts in 2024. This keeps a lid on the goodish US Dollar (USD) bounce from over a four-month low touched on Friday and turns out to be a key factor acting as a tailwind for the Gold price. Apart from this, geopolitical risks and worries about a deeper economic downturn, particularly in China and the Eurozone, benefit the safe-haven metal.

That said, a duo of Federal Reserve (Fed) officials on Friday tried to push back against market bets for early interest rate cuts. This, in turn, is holding back traders from placing fresh bullish bets and positioning for any further appreciating move in the Gold price. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for the XAU/USD is to the upside and any meaningful corrective decline might still be seen as a buying opportunity.

Technical Analysis: Gold price struggles to build on modest intraday uptick, bullish bias remains

From a technical perspective, any subsequent move up is likely to confront stiff resistance near the $2,040 supply zone, above which the Gold price could aim to retest last week’s swing high, around the $2,049-2,050 region. Some follow-through buying will be seen as a fresh trigger for bullish traders and pave the way for a move towards the next relevant barrier near the $2,072-2,073 area. The momentum could get extended further and allow the XAU/USD to reclaim the $2,100 round-figure mark.

On the flip side, the $2,015-2,010 horizontal resistance breakpoint might continue to protect the immediate downside ahead of the $2,000 psychological mark. A convincing break below the latter will make the Gold price vulnerable to challenge the 50-day SMA support, currently pegged near the $1,982-1,981 region. This is followed by last week’s swing low, around the $1,973 area, and the 200-day SMA, near the $1,956-1,955 zone, which if broken decisively will shift the near-term bias in favour of bearish traders.