Gold price struggles to lure buyers amid rising US bond yields, ahead of US macro data

• Gold price ticks higher amid subdued US Dollar price action, albeit lacks follow-through.
• Reviving bets for an early Fed rate cut and geopolitical risks lend support to the commodity.
• Rising US bond yields act as a tailwind for the USD and cap the upside for the XAU/USD.

Gold price (XAU/USD) attracts some buyers during the early part of the European session on Friday and looks to build on its recovery from a two-month low, around the $1,984 region touched this week. The US Dollar (USD) bulls prefer to wait on the sidelines amid the uncertainty over the Federal Reserve's (Fed) rate cut path, which, in turn, is seen as a key factor acting as a tailwind for the commodity. That said, a goodish pickup in the US Treasury bond yields, bolstered by Atlanta Fed President Raphael Bostic's hawkish remarks, lends some support to the Greenback and should cap gains for the non-yielding yellow metal.

Apart from this, a generally positive tone around the equity markets might further contribute to keeping a lid on any meaningful appreciating move for the safe-haven Gold price. Market participants now look to the US economic docket – featuring the Producer Price Index (PPI), Housing Starts and Michigan Consumer Sentiment Index. This, along with speeches by influential FOMC members, will drive the USD demand and provide some impetus to the XAU/USD. The focus will then shift to the FOMC meeting minutes, due next Wednesday. Nevertheless, the precious metal remains on track to end in the red for the second straight week.

Daily Digest Market Movers: Gold price benefits from subdued USD demand,  upside remains capped

• A combination of diverging forces fails to assist the Gold price to capitalize on this week's modest recovery from its lowest level since November 13.
• The yield on the benchmark 10-year US government bond holds above 4.0% and helps revive the USD demand, capping the upside for the XAU/USD.
• Thursday's dismal US data lifts hopes for an early rate cut by the Federal Reserve and boosts investors' confidence, further undermining the safe-haven metal.
• Bets for 25 basis points rate cut in May edged up to 40% and the odds for a move in June stood at 80% following the release of weaker US Retail Sales.
• The Commerce Department reported that Retail Sales declined sharply by 0.8% in January and sales excluding auto contracted by 0.6% last month.
• A separate report showed that import prices posted their biggest gain in nearly two years and jumped by 0.8% in January, the yearly rate fell 1.3%.
• Meanwhile, Jobless Claims declined by 8K from 220K in the previous week, to a one-month low level of 212K during the week ended February 10.
• Atlanta Fed President Bostic said on Thursday that the US central bank has made solid progress in lowering inflation and will soon contemplate cutting rates.
• Bostic added that a strong economy argues for patience in adjusting monetary policy and that the Fed does not face urgency to cut interest rates.
• The Israeli military said on Wednesday that its fighter jets began a series of strikes in Lebanon, raising the risk of a wider conflict in the Middle East.
• Traders now look to the US Producer Price Index for cues about the Fed's future policy decision and rate-cut path, which might provide a fresh impetus.
• Friday's US economic docket also features the release of Housing Starts and the Preliminary Michigan Consumer Sentiment Index for February.
• This, along with speeches by influential FOMC members, will drive the USD demand and produce short-term opportunities around the XAU/USD.

Technical Analysis: Gold price needs to move back above 50-day SMA for bulls to seize near-term control

From a technical perspective, any subsequent move up is likely to confront some resistance near the $2,015 level. Some follow-through buying should allow the Gold price to test the 50-day SMA, currently around the $2,030 region. The latter should act as a key pivotal point, which if cleared decisively will set the stage for additional gains beyond the $2,044-2,045 intermediate hurdle, towards the $2,065 supply zone.

On the flip side, the 100-day SMA, currently around the $1,992-1,991 area, could act as immediate support ahead of the $1,984 region, or a two-month low touched on Wednesday. This is followed by the very important 200-day SMA, currently pegged near the $1,965 area, which if broken decisively will be seen as a fresh trigger for bearish trades. The Gold price might then accelerate the fall towards an intermediate support near the $1,952-1,950 zone en route to the November 2023 low, around the $1,932-1,931 region.