Gold price surrenders modest intraday gains, eyes US macro data for fresh impetus

Gold price (XAU/USD) attracts some buyers for the second successive day on Wednesday, albeit lacks follow-through and remains below the monthly peak touched the previous day. Expectations that the Federal Reserve (Fed) will not hike interest rates any further and rising bets for policy easing by the first half of 2024 keep the yield on the benchmark 10-year US Government bond close to a two-month low. This, in turn, acts as a tailwind for the non-yielding yellow metal, though a modest US Dollar (USD) strength caps the upside. 

The USD Index (DXY), which tracks the Greenback against a basket of currencies, recovers further from its lowest level since August 31 touched on Tuesday in the wake of hawkish FOMC meeting minutes. In fact, policymakers reiterated the stance to keep interest rates higher for longer and tighten further if progress in controlling inflation falters. This, along with the recent repeated failures to build on the momentum beyond the $2,000 psychological mark, is holding back bulls from placing fresh bets around the Gold price. 

Daily Digest Market Movers: Gold price remains below the monthly peak touched on Tuesday

• The minutes from the Federal Reserve's latest meeting revealed officials backing higher for longer interest rates for some time to tame inflation and underpin the US Dollar. 
• Market participants, however, seem convinced that the US central bank will keep rates steady rather than hiking and are pricing in the possibility of rate cuts by spring 2024.
• The benchmark 10-year US Treasury bond yield languishes near a two-month low and turns out to be a key factor driving some flows towards the non-yielding yellow metal.
• The National Association of Realtors reported that US Existing Home Sales fell in October to a seasonally adjusted annual rate of 3.79 million units or the lowest level in more than 13 years.
• Israel and Hamas have agreed to a deal for the staggered release of 50 civilians held hostage in Gaza in exchange for Palestinian prisoners and a four-day halt to hostilities.
• The US military conducted discrete, precision strikes against two Iran-backed facilities in Iraq in response to the attacks against US and Coalition forces by Iran and Iran-backed groups.
• The markets reacted little to the latest development as there hasn't been any major escalation in the Middle East tensions, doing little to influence the safe-haven precious metal.
• Traders now look to the US macro data – Initial Weekly Jobless Claims, Durable Goods Orders and revised Michigan Consumer Sentiment Index – for short-term impetus.

Technical Analysis: Gold price struggles to capitalize on move beyond the $2,000 psychological mark

From a technical perspective, the recent repeated failures to build on the momentum beyond the $2,000 mark warrant some caution for bullish traders. Meanwhile, oscillators on the daily chart are holding comfortably in the positive territory and are still far from being in the overbought zone. The mixed setup makes it prudent to wait for some follow-through buying beyond the $2,009-2,010 area or a multi-month peak touched in October before positioning for any further gains. The XAU/USD might then accelerate the positive move further towards the $2,022-2,023 intermediate hurdle en route to the next relevant barrier near the $2,038 region.

On the flip side, the $1,991-1,990 area now seems to protect the immediate downside ahead of the $1,978-1,976 region. Some follow-through selling will expose the weekly low, around the $1,965 level, which if broken decisively could make the Gold price vulnerable to accelerate the slide back towards challenging the 200-day Simple Moving Average (SMA), currently pegged near the $1,938-1,939 zone. This is followed by the confluence of the 100- and the 50-day SMAs, around the $1,932-1,931 region. The latter coincides with the monthly low and should act as a key pivotal point for short-term traders.