Gold price remains confined in a range below 50-day SMA, FOMC minutes in focus

• Gold price continues with its struggle to gain any meaningful traction on Wednesday.
• Traders seem reluctant and prefer to wait for more cues about the Fed’s rate-cut path.
• Investors look to FOMC minutes for some impetus ahead of the NFP report on Friday.

Gold price (XAU/USD) struggles to capitalize on the overnight bounce from the $2,319 area and oscillates in a narrow band below the 50-day Simple Moving Average (SMA) during the Asian session on Wednesday. The commodity remains confined in a familiar range held over the past week or so as traders prefer to wait for more cues about the Federal Reserve’s (Fed) policy path before placing fresh directional bets. Hence, the focus remains glued to the release of FOMC meeting minutes later today, which, along with the Nonfarm Payrolls (NFP) report on Friday, might influence expectations about the Fed’s future policy decisions. This will drive the near-term US Dollar (USD) demand and provide a fresh impetus to the non-yielding yellow metal.

In the meantime, Fed Chair Jerome Powell sounded slightly dovish on Tuesday and reaffirmed bets that the central bank is more than likely to start its rate-cutting cycle later this year. This leads to a modest pullback in the US Treasury bond yields and keeps the USD bulls on the defensive, which is seen acting as a tailwind for the Gold price. Apart from this, concerns over a slowdown in global economic growth, persistent geopolitical tensions, along with political uncertainty in the US and Europe, should help limit the downside for the safe-haven precious metal. Meanwhile, the mixed fundamental backdrop makes it prudent to wait for a sustained breakout through a short-term range before positioning for the next leg of a directional move for the XAU/USD. 

Daily Digest Market Movers: Gold price awaits more Fed signals before the next leg of a directional move

• Investors opt to wait on the sidelines and seek more clarity about the Federal Reserve’s rate-cut path, leading to subdued range-bound price action around the Gold price for the fourth straight day on Wednesday.
• Fed Chair Jerome Powell expressed satisfaction with the progress on inflation but said that he wants to be more confident that it is moving sustainably down toward 2% before starting the process of reducing rates.
• The markets are currently pricing in a greater chance that the Fed will lower borrowing costs in September and the possibility of another rate cut in December, triggering a pullback in the US Treasury bond yields.
• The yield on the benchmark 10-year US government bond retreats further from a one-month high touched on Monday, which keeps the US Dollar bulls on the defensive and acts as a tailwind for the commodity. 
• This overshadowed the Job Openings and Labor Turnover Survey, or JOLTS report that showed US job openings rose to 8.140 million on the last day of May from April’s downwardly revised figure of 7.092 million.
• Expectations that a Trump presidency would lead to higher tariffs, and government borrowing and be more inflationary than the Biden administration should limit the downside for the US bond yields, in turn, the USD.
• Investors now look forward to the release of the FOMC meeting minutes, due later today, for some meaningful impetus ahead of the closely-watched US monthly employment details, or the NFP report on Friday.
• Wednesday’s US economic docket also highlights the release of the ISM Services PMI, which might influence the USD price dynamics and contribute to producing short-term trading opportunities around the metal.

Technical Analysis: Gold price could appreciate further once the 50-day SMA barrier is taken out decisively

From a technical perspective, the recent range-bound price action points to indecision among traders over the near-term trajectory. Moreover, neutral oscillators on the daily chart further warrant caution before placing aggressive directional bets. Meanwhile, the 50-day SMA, currently pegged near the $2,340 area, might continue to act as an immediate hurdle ahead of the late June swing high, around the $2,365-2,370 region. Some follow-through buying should allow bulls to reclaim the $2,400 round-figure mark and aim towards challenging the all-time peak, around the $2,450 area touched in May.

On the flip side, the $2,319-2,318 area now seems to have emerged as immediate strong support ahead of the $2,300 mark and the $2,285 horizontal zone. A convincing break below the latter will be seen as a fresh trigger for bearish traders and make the Gold price vulnerable to accelerate the fall further towards the 100-day SMA, currently near the $2,258 region. The metal could extend the downward trajectory further towards the $2,225-2,220 region before eventually dropping to the $2,200 round-figure mark.