Gold price sticks to modest intraday gains, looks to Fed for fresh directional impetus

• A combination of supporting factors assists Gold price to attract some dip-buyers on Tuesday.
• September Fed rate cut bets undermine the USD and act as a tailwind amid a softer risk tone.
• Traders look to the Fed decision and important US macro data for a fresh directional impetus. 

Gold price (XAU/USD) attracts some dip-buying during the Asian session on Tuesday, though remains confined in the previous day's broader trading range and below the $2,400 mark. A weaker tone around the equity markets, along with geopolitical risks stemming from conflicts in the Middle East, turn out to be key factors underpinning the safe-haven commodity. Furthermore, growing acceptance that the Federal Reserve (Fed) will begin its rate-cutting cycle in September keeps the US Dollar (USD) bulls on the defensive below a two-week high touched on Monday and further benefits the non-yielding yellow metal.

The upside for the Gold price, however, is likely to remain capped as traders might prefer to wait for more cues about the Fed's policy path before committing to a firm near-term direction. Hence, the focus will remain glued to the outcome of a two-day Federal Open Market Committee (FOMC) meeting on Wednesday. This, along with important US macro data, including the Nonfarm Payrolls (NFP) report on Friday, will influence the USD price dynamics and the XAU/USD. This makes it prudent to wait for some follow-through buying before confirming that the recent pullback from the all-time peak has run its course. 

Daily Digest Market Movers: Gold price attracts some haven flows amid softer risk tone

• The US Dollar shot to a two-and-half-week top on Monday, which, along with a positive risk tone, failed to assist the Gold price in building on last week's modest bounce from the vicinity of the $2,350 level. 
• Israel vowed retaliation against Iran-backed Lebanese group Hezbollah in response to the Golan Heights attack on Saturday, though said that it wants to avoid dragging the Middle East into an all-out war.
• Further evidence of easing price pressures in the US reaffirmed market bets for an imminent start of the Federal Reserve's policy easing cycle in September and kept the US Treasury bond yields depressed. 
• The yield on the rate-sensitive 2-year US government bond fell to its lowest since February 2, while the benchmark 10-year Treasury yield hangs near a one-month low amid the improving inflation landscape.
• This, in turn, should cap any further upside for the USD and act as a tailwind for the non-yielding yellow metal as traders now look forward to this week's key central bank event risks for some meaningful impetus. 
• The Bank of Japan and the Fed are scheduled to announce their respective policy decisions at the end of a two-day meeting on Wednesday, which will be followed by the Bank of England policy update on Thursday.
• Investors this week will also confront key macro releases scheduled at the start of a new month, including the official Chinese PMIs, Eurozone consumer inflation figures and the US Nonfarm Payrolls report.

Technical Analysis: Gold price might struggle to find acceptance above the $2,400 mark

From a technical perspective, the overnight failure to find acceptance above the $2,400 mark and the subsequent downtick warrants some caution before positioning for any meaningful upside. Moreover, oscillators on the daily chart have just started gaining negative traction and suggest that the path of least resistance for the Gold price is to the downside. Bearish traders, however, need to wait for a sustained break below the 50-day Simple Moving Average (SMA) support, currently pegged near the $2,358 region, before placing fresh bets. 

Some follow-through selling below last week's swing low, around the $2,353 area, will reaffirm the negative outlook and drag the XAU/USD to the next relevant support near the $2,325 area. The downward trajectory could extend further towards testing the $2,300 round-figure mark for the first time since late June.

On the flip side, momentum above the $2,400 mark is likely to confront some resistance near the $2,412 area ahead of last week's swing high, around the $2,432 region. A sustained strength beyond the latter will suggest that the corrective decline from the all-time peak touched earlier this month has run its course and set the stage for additional gains. The Gold price might then climb to the $2,469-2,470 intermediate resistance and challenge the record peak, around the $2,483-2,484 zone.