The Gold price (XAU/USD) continues its consolidative phase, oscillating around the 50-day Simple Moving Average (SMA) on Wednesday. Traders exhibit caution as they await fresh catalysts to determine the next directional move. The spotlight remains on the upcoming US Personal Consumption Expenditures (PCE) Price Index, scheduled for Thursday, offering insights into the Federal Reserve’s (Fed) potential rate-cut strategy and influencing the trajectory of the non-yielding yellow metal.
The current scenario witnesses some buying in the US Dollar (USD), fueled by hawkish expectations from the Federal Reserve (Fed), acting as a restraining factor for Gold prices. Additionally, the prevalent risk-on sentiment in the market contributes to limiting the appeal of the safe-haven metal. However, the prospect of a decline in US Treasury bond yields might impede aggressive USD bullish bets, providing a potential lifeline for XAU/USD.
Traders are directing their attention to the preliminary US Q4 GDP print, set for release during the early North American session. The impact of this, coupled with speeches from influential Federal Open Market Committee (FOMC) members, is expected to add momentum to both the Greenback and Gold prices. Nevertheless, the mixed fundamental backdrop encourages a cautious approach, urging market participants to exercise prudence before engaging in aggressive directional trades.
