Gold Price Analysis: XAU/USD trades with modest losses, around $1945-40 region

Gold maintained its offered tone through the early European session and was last seen hovering near the lower end of its daily trading range, around the $1940 region.

The precious metal failed to capitalize on the previous day's goodish rebound from the $1900 neighbourhood, or two-week lows and met with some fresh supply on Thursday. The downtick lacked any obvious fundamental catalyst and could be solely attributed to some technical selling from the $1955 supply zone.

However, a combination of factors held investors from placing any aggressive bearish bets and might help limit any deeper losses. The US dollar remained on the defensive amid expectations of dovish Fed signals, which, in turn, was seen as one of the key factors that extended some support to the dollar-denominated commodity.

Adding to this, a softer risk tone further underpinned the precious metal's safe-haven demand. The anti-risk flow was reinforced by a fresh leg down in the US Treasury bond yields, which might further collaborate towards limiting any meaningful slide for the non-yielding yellow metal, at least for the time being.

This makes it prudent to wait for some strong follow-through selling before positioning for any further near-term depreciating move. Market participants now look forward to Thursday's release of the prelim (second estimate) US GDP report. The key focus, however, will remain on the Fed Chair Jerome Powell's speech during the Jackson Hole Symposium.

Technical levels to watch