Gold price sticks to modest intraday gains, remains below record peak touched last week

• Gold price attracts some dip-buyers on Tuesday and snaps a two-day losing streak. 
• Bets for more Fed rate cuts and geopolitical risks continue to benefit the XAU/USD.
• Traders now look to the release of key US macro data for some meaningful impetus. 

Gold price (XAU/USD) regains positive traction on Tuesday and for now, seems to have stalled a two-day-old corrective slide from the all-time peak touched last week. The risk of a further escalation of geopolitical tensions in the Middle East is seen as a key factor underpinning demand for the safe-haven precious metal. Apart from this, expectations that a continued slowdown in the US inflation should allow the Federal Reserve (Fed) to cut interest rates further, along with hopes that China's stimulus bonanza will revive physical demand, act as a tailwind for the commodity.

Meanwhile, Fed Chair Jerome Powell's relatively hawkish comments on Monday forced investors to scale back their bets for a more aggressive policy easing. This, in turn, assists the US Dollar (USD) to attract buyers for the second straight day and build on the overnight bounce from its lowest level since July 2023. Apart from this, the bullish sentiment across the global financial markets might cap the Gold price ahead of this week's important US macro releases scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later today.

Daily Digest Market Movers: Gold price attracts haven flows amid escalating tensions in the Middle East

• A slew of stimulus measures from China last week continued to boost investors' appetite for riskier assets and drove some flows away from the traditional safe-haven Gold price for the second successive day on Monday.
• Furthermore, Federal Reserve Chair Jerome Powell adopted a more hawkish tone on the economy and said that he sees two more 25 basis point interest rate cuts this year as a baseline if the economy performs as expected.
• The markets were quick to react and scaled back expectations for a more aggressive policy easing by the Fed, prompting some follow-through profit-taking around the non-yielding yellow metal and contributing to the slide. 
• Meanwhile, the markets are still pricing in the possibility of an oversized Fed rate cut by the end of this year, which, along with persistent geopolitical tensions, acts as a tailwind for the safe-haven precious metal. 
• Israeli forces have begun limited, localized, and targeted ground raids in Lebanon two days after they killed the head of the armed group Hezbollah Hassan Nasrallah in an airstrike, threatening to worsen the Middle East crisis.
• Israel last week had rejected a proposal by the US and France, calling for a 21-day ceasefire on the Lebanon border to give time for a diplomatic settlement that would allow displaced civilians on both sides to return home.
• Traders now look to the US economic docket – featuring the release of the ISM Manufacturing PMI and JOLTS Jobs Opening – for some impetus ahead of other key macro data scheduled at the beginning of a new month.

Technical Outlook: Gold price setup remains tilted in favor of bulls, $2,625-2,624 support holds the key

From a technical perspective, the emergence of some buying near the $2,625-2,624 area reaffirms a support marked by a short-term ascending trend-channel resistance breakpoint and should act as a pivotal point. Some follow-through selling could drag the Gold price to the $2,600 mark, which if broken decisively could pave the way for some meaningful downside in the near term. The XAU/USD might then decline to the $2,560 intermediate support en route to the $2,535-2,530 region.

On the flip side, the $2,656-2,657 horizontal zone could offer some resistance ahead of the $2,672 area and the $2,685-2,686 region, or the record peak touched last week. This is closely followed by the $2,700 mark, which if conquered will be seen as a fresh trigger for bullish traders and set the stage for an extension of a multi-month-old uptrend.