Gold price flirts with weekly top, looks to Fed for the next leg up

• Gold price hits weekly high, rising for the second successive day.
• Geopolitical risks, modest USD downtick and global economic woes underpin the XAU/USD.
• Traders now look to the Fed policy decision before committing to a firm near-term direction.

Gold price (XAU/USD) is stretching higher above $2,420 on Wednesday, having reversed the intraday dip to the $2,400 neighborhood. The move up for the third day in the previous four is sponsored by a combination of factors and lifts the commodity to a one-week peak, around the $2,419 region during the Asian session. The Israeli attack on the Lebanon capital as retaliation for a rocket strike in the Golan Heights on Saturday raised the risk of a further escalation of geopolitical tensions in the Middle East. 

Apart from this, a sluggish global economic growth outlook and a further US Dollar (USD) pullback from a nearly three-week high touched on Tuesday benefit the Gold price. Bulls, however, might refrain from placing aggressive bets and prefer to wait for more cues about the Federal Reserve's (Fed) rate-cut path. Hence, the focus will remain glued to the outcome of a two-day Federal Open Market Committee (FOMC) meeting, due later today. This, along with geopolitical developments, will determine the near-term trajectory for the XAU/USD. 

Daily Digest Market Movers: Gold price buoyed by rising Middle East tensions, dovish Fed-inspired USD downtick

• Geopolitical risks stemming from the ongoing conflicts in the Middle East, along with worries about a global economic slowdown and a modest US Dollar pullback, lifts the Gold price to a one-week high on Wednesday.
• The Israeli military attacked Lebanon’s capital Beirut and targeted the Hezbollah commander who was responsible for the strike in Golan Heights on Saturday, fueling worries about an all-out war in the region.
• According to the preliminary estimates published by federal statistical office Destatis, the German economy unexpectedly shrank by 0.1% in Q2 as compared to the 0.2% growth in the previous three months.
• The US Job Openings and Labor Turnover Survey (JOLTS) revealed that the number of job openings fell to 8.18M in June from 8.23M in the previous month, though was above market expectation of 8.03 million.
• The Conference Board's Consumer Confidence Index rose slightly to 100.3 in July from the previous month's downwardly revised reading of 97.8 as consumers remain relatively positive about the labor market.
• The USD did get a minor lift in reaction to the upbeat US macro data, though the momentum faded rather quickly amid bets for an imminent start of the Federal Reserve's rate-cutting cycle in September.
• The National Bureau of Statistics (NBS) reported this Wednesday that business activity in China's manufacturing sector contracted for the third straight month in July and the growth in the services sector remained tepid. 
• Investors now look to the highly anticipated Fed policy update for cues about the rate-cut path, which, in turn, will play a key role in influencing demand for the non-yielding yellow metal in the near term.

Technical Analysis: Gold price bulls have the upper hand while above the $2,400 mark

From a technical perspective, the recent bounce from the vicinity of the $2,350 area, or 50-day Simple Moving Average (SMA) support zone, and the subsequent move beyond the $2,400 mark favors bullish traders. Moreover, oscillators on the daily chart have again started gaining positive traction and support prospects for additional gains. Adding to this, strength beyond the $2,412-2,413 region reaffirms the positive outlook and should now lift the Gold price to last week's swing high, around the $2,432 zone. 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 XAU/USD might then climb to an intermediate hurdle near the $2,469-2,470 region and aim to challenge the record peak, around the $2,483-2,484 zone.

On the flip side, the $2,400 mark now seems to protect the immediate downside ahead of the $2,383-2,382 region, below which the Gold price could slide back to the 50-day SMA, currently pegged near the $2,359 area. A convincing break through the latter, leading to a subsequent fall below last week's swing low, around the $2,353 area, will be seen as a fresh trigger for bearish traders and make the XAU/USD vulnerable. The downward trajectory could extend further towards testing the next relevant support near the $2,325 area en route to the $2,300 round-figure mark.