Gold price remains confined in a range below all-time peak, awaits Fed's Powell on Friday

Most recent article: Gold extends shallow pullback ahead of key data releases 

• Gold price edges lower on Thursday amid rebounding US bond yields and modest USD strength. 
• Fed rate cut bets cap the attempted USD recovery and help limit the downside for the XAU/USD. 
• Geopolitical risk also offers support the safe-haven metal and warrants caution for bearish traders.

Gold price (XAU/USD) remains on the defensive heading into the European session on Thursday, albeit holds above the $2,500 psychological mark and remains within the striking distance of the all-time peak touched earlier this week. A modest US Dollar (USD) rebound from the YTD low set on Wednesday, supported by an uptick in the US Treasury bond yields, is seen as a key factor undermining the commodity. Apart from this, the underlying bullish tone across the global equity markets contributes to the mildly offered tone surrounding the safe-haven precious metal. 

The downside for the Gold price, however, remains cushioned in the wake of rising bets for a more aggressive policy easing by the Federal Reserve (Fed). In fact, data released on Wednesday showed that US job growth over the past year to March was weaker than initially estimated. Moreover, the July FOMC meeting minutes showed that several officials were leaning toward an immediate rate cut. This, along with geopolitical risks, continues to lend some support to the XAU/USD and warrants some caution before positioning for any meaningful corrective decline. 

Traders might also prefer to wait for Fed Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday before placing fresh directional bets. In the meantime, Thursday's US economic docket – featuring the release of the usual Weekly Initial Jobless Claims and Existing Home Sales data – could produce short-term trading opportunities around the Gold price later during the North American session.

Daily Digest Market Movers: Gold price continues to draw support from dovish Fed expectations

• The US Dollar dived to a fresh YTD low on Wednesday in reaction to data indicating that the labor market was not as strong as estimated and assisted the Gold price in reversing an intraday dip to sub-$2,500 levels. 
• The preliminary annual benchmark review of employment data published by the US Bureau of Labor Statistics showed that US employers added 818,000 fewer jobs than were reported during the year through March. 
• Furthermore, the minutes of the July 30-31 FOMC meeting revealed that a vast majority of officials backed the case for a rate cut in September, while some policymakers were leaning toward immediate action. 
• The markets are now pricing in a 38% probability of a 50 basis points rate cut next month, up from 29% a day before, and about 100 bps worth of easing by the end of this year, underpinning the non-yielding metal. 
• Meanwhile, a truce agreement between Israel and Hamas still seems elusive, which keeps the risk of a broader Middle East conflict on the table and could turn out to be another factor lending support to the XAU/USD. 
• Traders now look forward to the US economic docket – featuring the release of the Weekly Initial Jobless Claims and Existing Home Sales data – for short-term opportunities later during the North American session.
• The market focus, however, will remain on Fed Chair Jerome Powell's speech on Friday to see if the significantly weaker-than-expected US job growth makes a strong case for a larger interest rate cut in September.

Technical Analysis: Gold price remains close to all-time peak, bulls not ready to give up yet

From a technical perspective, the range-bound price action witnessed since the beginning of this week could be categorized as a bullish consolidation phase before the next leg up. Moreover, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone, validating the near-term constructive outlook. Hence, a move back towards retesting the all-time peak, around the $2,531-2,532 area touched on Tuesday, looks like a distinct possibility. Some follow-through buying will reaffirm be seen as a fresh trigger for bulls and pave the way for an extension of the recent well-established uptrend.

On the flip side, any meaningful pullback might continue to attract some buyers near the $2,500 round figure. This should help the downside for the Gold price near the $2,480 triple top resistance breakpoint. A convincing break below the latter might prompt some technical selling and drag the XAU/USD towards the $2,455-2,453 horizontal support en route to the $2,430 region. The corrective slide could extend further towards the 50-day Simple Moving Average (SMA), currently pegged near the $2,400 mark.