• Gold price continues its struggle to gain any meaningful positive traction on Wednesday.
• Bets for a less dovish Fed and an uptick in the US bond yields cap the precious metal.
• Geopolitical risks and trade war fears lend some support amid subdued USD demand.

Gold price (XAU/USD) trades with a positive bias for the second straight day on Wednesday, albeit it lacks bullish conviction and remains confined in a familiar range held over the past week or so. Traders now seem reluctant and opt to wait for more cues about the Federal Reserve’s (Fed) rate-cut path before placing directional bets. Hence, the market focus will remain glued to Fed Chair Jerome Powell’s speech later today, which, along with the US Nonfarm Payrolls (NFP) report on Friday, should guide policymakers on their next monetary policy decision. This, in turn, will play a key role in determining the near-term trajectory for the non-yielding yellow metal.

In the meantime, expectations that the Fed will adopt a cautious stance on cutting rates, amid concerns that US President-elect Donald Trump’s policies will boost inflation, remain supportive of a modest uptick in the US Treasury bond yields. This, in turn, offers some support to the US Dollar (USD) and might continue to act as a headwind for the Gold price. The downside for the safe-haven XAU/USD, however, remains cushioned amid persistent geopolitical tensions, Trump’s looming trade tariff and fears about the second wave of global trade wars. Traders now look to the US ADP report on private-sector employment and the US ISM Services PMI for some impetus. 

Gold price draws support from safe-haven demand, lacks bullish conviction ahead of Fed’s Powell

• Traders now seem reluctant to place aggressive directional bets around the Gold price and await Federal Reserve Chair Jerome Powell’s speech for cues about the interest rate outlook. 
• A survey (JOLTS) published by the US Bureau of Labor Statistics (BLS) on Tuesday showed that the number of job openings increased solidly from 7.37 million to 7.74 million in October. 
• The strong US labor market report comes on top of stalling progress in lowering inflation to the 2% target and suggests that the US central bank could pause its rate-cutting cycle next year. 
• The prospects for a less dovish Fed remain supportive of a modest uptick in the US Treasury bond yields, though does little to impress the US Dollar bulls or provide any meaningful impetus.
• According to the CME Group’s FedWatch Tool, the markets are still pricing over a 70% chance that the Fed will cut rates by 25 basis points at its upcoming meeting in December. 
• San Francisco Fed President Mary Daly said that the US economy is in a good place the balanced labor market is not a source of inflation and that the December rate cut is not off the table.
• Fed Governor Adrianna Kugler noted that the progress on inflation is still underway and the central bank will make decisions meeting by meeting and that the policy is not on a preset course.
• Chicago Fed President Austan Goolsbee said that rates remain restrictive and need to come down a fair amount from where they are now over the next year if inflation gets close to the target.
• US President-elect Donald Trump pledged to impose big tariffs against America’s three biggest trading partners – Mexico, Canada and China – and also threatened a 100% tariff on ‘BRICS’ nations. 
• Israel carried out its biggest wave of air strikes since the truce agreement with Lebanon in retaliation to the firing of two rockets at Israeli-occupied territory by the Iran-backed group Hezbollah. 
• China’s Caixin Services Purchasing Managers’ Index (PMI) unexpectedly fell to 51.5  in November from 52.0, fueling worries about a fragile recovery in the world’s second-largest economy.

Gold price is likely to face strong barrier near last week’s swing high, around the $2,666 area

From a technical perspective, the recent range-bound price action might still be categorized as a bearish consolidation phase against the backdrop of last week’s decline. Adding to this, this week’s breakdown below a four-day-old ascending channel favors bearish traders. That said, neutral oscillators on the daily chart suggest that any further slide below the overnight swing low, around the $2,622-2,621 area, might continue to find some support near the $2,600 mark. Some follow-through selling, meanwhile, might expose the 100-day Simple Moving Average (SMA), currently around the $2,579-2,78 zone, below which the Gold price could retest the November monthly trough, around the $2,537-2,536 region.

On the flip side, the $2,655 area, followed by the $2,666 region might act as immediate strong barriers. The next relevant hurdle is pegged near the $2,677-2,678 zone, above which the Gold price could aim to reclaim the $2,700 round figure. Any further move up is likely to confront stiff resistance near the $2,721-2,722 supply zone. A sustained strength beyond the latter might shift the bias in favor of bullish traders and pave the way for some meaningful appreciating move in the near term.