Gold price holds steady above $2,400 mark amid mixed fundamental cues

• Gold price edges higher and moves away from a one-week low touched on Monday. 
• Bets for a 50-bps Fed rate cut in September and geopolitical risks lend some support.
• A turnaround in the global risk sentiment and rebounding US bond yields could cap gains.

Gold price (XAU/USD) touched a one-week low on Monday, although it managed to defend and rebound from the 50-day Simple Moving Average (SMA) support around the $2,365-2,364 region. The incoming softer US macro data fueled worries about a downturn in the world's largest economy and raised expectations for bigger interest rate cuts by the Federal Reserve (Fed). This led to the recent slump in the US Treasury bond yields, which, along with the worsening Middle East crisis, offers some support to the safe-haven precious metal. 

That said, a turnaround in the risk sentiment – as depicted by a relief rally in the equity markets – could act as a headwind for the Gold price amid rebounding US bond yields, which offers support to the US Dollar (USD). Nevertheless, the aforementioned fundamental backdrop seems tilted in favor of bullish traders and suggests that the path of least resistance for the XAU/USD is to the upside. Hence, weakness below the $2,400 mark might continue to attract buyers and remain limited in the absence of relevant US economic releases. 

Daily Digest Market Movers: Gold price draws support from bets for bigger Fed rate cuts and Middle East tensions

• The US macro data released last week showed that business activity in the manufacturing sector contracted more sharply than expected in July and jobs growth slowed more than anticipated last month.
• This sparks fear of a possible recession in the US and the prospects for a more aggressive policy easing by the Federal Reserve, which, in turn, triggered the recent steep decline in the US Treasury bond yields. 
• In fact, the yield on the benchmark 10-year US government bond slumped to its lowest level since mid-2023 as traders are now pricing in a near 100% chance of a 50-basis points Fed rate cut in September. 
• This, to a larger extent, overshadowed Tuesday's upbeat release of the US Services PMI, which improved to 51.4 in July from 48.8 in the previous month and surpassed consensus estimates for a reading of 51.
• Iran, Hamas and the Lebanese group Hezbollah pledged to retaliate against Israel for last week’s assassination of Hamas political chief Ismail Haniyeh in Tehran, further underpinning the safe-haven metal.
• That said, the risk-on impulse, along with rebounding US Treasury bond yields and a modest US Dollar uptick, fails to assist the commodity in attracting meaningful buyers during the Asian session on Tuesday.

Technical Analysis: Gold price looks to build on the overnight bounce from the 50-day SMA pivotal support

From a technical perspective, the overnight bounce reaffirmed strong support near the 50-day SMA, currently pegged near the $2,365-2,364 area. This should now act as a key pivotal point for short-term traders, which if broken decisively should pave the way for an extension of the recent pullback from the vicinity of the all-time peak. Some follow-through selling below last week's swing low, around the $2,353-2,352 region, will reaffirm the negative bias and drag the Gold price to the $2,342 zone, or the 100-day SMA. A convincing break below the latter might shift the near-term bias in favor of bearish traders and prompt aggressive technical selling. 

On the flip side, the $2,430 level could offer some immediate resistance ahead of the $2,448-2,450 horizontal zone. The next relevant hurdle is pegged near the $2,468-2,469 region, above which the Gold price could aim to challenge the all-time top near the $2,483-2,484 area touched in July. The latter is followed by the $2,500 psychological mark, which if cleared decisively will set the stage for a further near-term appreciating move.