Gold price sticks to modest intraday losses as traders keenly await US PCE Price Index

Gold price (XAU/USD) comes under some renewed selling pressure on the last day of the week and erodes a part of Thursday's recovery move of over 1% from a two-week low. The US Dollar (USD) regains positive traction following Thursday's softer US data-led decline and climbs to a nearly two-month peak amid a goodish pickup in the US Treasury bond yields, bolstered by the Federal Reserve's (Fed) hawkish outlook. Apart from this, some repositioning trade ahead of the US inflation data provides an additional boost to the Greenback, which, in turn, is seen as undermining the commodity. 

Investors, meanwhile, are still pricing in a greater chance that the Fe will start its rate-cutting cycle in September amid signs of easing inflationary pressures and a slowdown in the economic momentum. This, along with geopolitical tensions in the Middle East and the protracted Russia-Ukraine, acts as a tailwind for the safe-haven Gold price. Traders also seem reluctant to place aggressive directional bets and prefer to wait for more cues about the Fed's policy path. Hence, the focus will remain glued to the release of the US Personal Consumption Expenditures (PCE) Price Index, due later during the North American session.

Daily Digest Market Movers: Gold price is weighed down by higher US bond yields and resurgent USD demand

• The softer US macro data published on Thursday lifted bets for an imminent start of the Federal Reserve's rate-cutting cycle this year and triggered a short-covering rally around the Gold price.
• The real US GDP growth for the first quarter was revised up to 1.4% annualized pace, though it marked the slowest rise since spring 2022 and confirmed a sharp slowdown from 3.4% in the previous quarter.
• The US Census Bureau reported that Durable Goods Orders increased by 0.1% in May as compared to a 0.1% fall anticipated and the 0.6% growth (revised from +0.7%) recorded in the previous month.
• Separately, the Labor Department said that Initial Jobless Claims fell to 233,000 in the week ended June 22, but the four-week moving average rose to 236,000, or the highest level since last September. 
• Furthermore, US Pending Home Sales – a forward-looking indicator of home sales based on contract signings– unexpectedly decreased by 2.1% in May, to the lowest level on record going back to 2001.
• This comes on top of tepid US Retail Sales figures for May and signs that inflation is subsiding, which, in turn, should allow the Fed to lower borrowing costs as early as the September policy meeting.
• The US Dollar, however, found some support from comments by Fed Governor Michelle Bowman, saying that we are not at a point yet to consider a rate cut as the upside risks to inflation persist.
• Adding to this, rebounding US Treasury bond yields underpins the USD and weighs on the XAU/USD ahead of the US Personal Consumption Expenditures (PCE) Price Index – the Fed's preferred inflation gauge.

Technical Analysis: Gold price remains below 50-day SMA pivotal resistance, bulls not out of the woods yet

From a technical perspective, the overnight positive move stalled ahead of the 50-day Simple Moving Average (SMA) support breakpoint, now turned resistance. The said barrier is currently pegged near the $2,337-2,338 region, which should now act as a key pivotal point. A sustained strength beyond has the potential to lift the Gold price back towards the $2,360-2,365 supply zone. Some follow-through buying will negate any near-term negative bias and allow bulls to reclaim the $2,400 round-figure mark. The momentum could extend further towards challenging the all-time peak, around the $2,450 area touched in May.

On the flip side, the $2,300 round-figure mark is likely to protect the immediate downside ahead of the $2,285 horizontal support. A convincing break below the latter will be seen as a fresh trigger for bearish traders and drag the Gold price to the 100-day SMA, currently near the $2,250 area. The XAU/USD could eventually drop to the $2,225-2,220 region en route to the $2,200 round-figure mark.