Gold price extends sideways consolidative price move around $2,500, bullish bias remains

Most recent article: Gold holds just above $2,500 after Friday's late surge

• Gold price kicks off the new week on a softer note and moves away from Friday's record high. 
• Fed rate cut bets, along with geopolitical tensions, continue to act as a tailwind for the metal.
• Investors look to FOMC minutes and Fed Chair Powell’s speech this week for a fresh impetus.

Gold price (XAU/USD) remains on the defensive through the early European session on Monday, albeit manages to hold above the $2,500 mark and remain well within the striking distance of the record peak. Growing acceptance that the Federal Reserve (Fed) will start lowering borrowing costs in September triggers a fresh leg down in the US Treasury bond yields. This, in turn, drags the US Dollar (USD) to its lowest level since January and acts as a tailwind for the non-yielding yellow metal. 

Apart from this, the risk of a further escalation of geopolitical tensions in the Middle East and the protracted Russia-Ukraine war contribute to limiting the downside for the safe-haven commodity. Traders, however, seem reluctant to place fresh bets around the Gold price and prefer to wait for more cues about the Fed's rate-cut path. Hence, the focus remains glued to the release of the FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell's speech at the Jackson Hole Symposium. 

Daily Digest Market Movers: Gold price awaits more cues about Fed's rate-cut path before the next leg up

• Dovish Federal Reserve expectations, along with rising geopolitical tensions in the Middle East, lifted the Gold price to a fresh record high – levels beyond the $2,500 psychological mark – on Friday. 
• The US Producer Price Index and Consumer Price Index released last week indicated that inflation is on a downward trend, which keeps the Fed on track for a 25-basis-point rate cut in September. 
• This, to a larger extent, overshadowed Thursday's upbeat US Retail Sales data, which eased concerns about a recession in the world's largest economy and attracted fresh sellers around the US Dollar. 
• Furthermore, the University of Michigan’s preliminary report showed that the US Consumer Sentiment Index improved for the first time after four months of declines and rose to 67.8 in August.
• Another key part of the report revealed that expectations for overall inflation over the next year held steady at 2.9% and over the next five years was unchanged for the fifth straight month at 3%.
• This, however, did little to impress the USD bulls amid bets for an imminent start of the Fed's policy easing cycle, which has been a key factor driving flows towards the non-yielding yellow metal. 
• Chicago Fed President Austan Goolsbee said the US economy is not showing signs of overheating, so central bank officials should be wary of keeping restrictive policy in place longer than necessary.
• San Francisco Fed President Mary Daly downplayed concerns about a sharp US economic slowdown, though said that the US central bank needs to take a gradual approach to lower borrowing costs.
• Investors now look to the FOMC minutes, due for release on Wednesday, and Fed Chair Jerome Powell's comments at the Jackson Hole Symposium on Friday for cues about future rate-cut path. 
• On the geopolitical front, Hamas published an official statement on Sunday rejecting the terms for a hostage release-ceasefire deal which were discussed in Doha on Thursday and Friday.
• Russia vowed to retaliate to Ukraine’s unexpected cross-border attack into the Kursk region that marked the first time since World War Two that a foreign army has been fighting in the country.

Technical Analysis: Gold price bulls remain on the defensive below the all-time peak, around $2,510 set on Friday

From a technical perspective, Friday's breakout through the $2,470-2,472 horizontal barrier and a subsequent strength beyond the previous all-time high was seen as a fresh trigger for bullish traders. Furthermore, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, suggesting that the path of least resistance for the Gold price is to the upside. That said, failure to build on the momentum beyond the $2,500 psychological mark warrants some caution for bulls. Hence, it will be prudent to wait for some follow-through buying beyond Friday's allow-time peak, around the $2,509-2,510 area, before positioning for any further gains.

On the flip side, the $2,472-2,470 resistance breakpoint now seems to protect the immediate downside. Any further decline is more likely to attract fresh buyers and remain limited near the $2,448-2,446 region. The latter should act as a key pivotal point for short-term traders, which if broken decisively should pave the way for deeper losses. The Gold price might then accelerate the corrective slide towards the 50-day Simple Moving Average (SMA), currently pegged near the $2,388-2,387 zone, with some intermediate support near the $2,400 round figure.