Gold price holds positive ground ahead of Fed Powell’s testimony

• The Gold price posts modest gains in Tuesday’s early Asian session. 
• Rising rates cut expectations and safe-haven flows might cap the precious metal’s downside.
• Pausing China's PBoC Gold purchases will likely weigh on XAU/USD in the near term. 

The Gold price (XAU/USD) trades with mild gains on the weaker US Dollar (USD) during the early Asian session on Tuesday. The downside for the precious metal might be limited as traders raise their bets that the US Federal Reserve (Fed) would cut interest rates in September following soft US employment data last week. Additionally, the cautious mood amid the political uncertainties in France and geopolitical tensions in the Middle East might boost the Gold price, a traditional safe-haven asset.

Nonetheless, Gold prices might be dragged lower by the People Bank of China’s (PBoC) decision not to buy Gold for a second straight month in June. Gold traders will monitor Fed Chair Jerome Powell's semi-annual Congressional testimony, along with the speeches from Fed’s Michael Barr and Michelle Bowman. On Thursday, the US Consumer Price Index (CPI) inflation data will take center stage. 

Daily Digest Market Movers: Gold price remains strong amid rising Fed rate cut bets

• The Chinese central bank kept Gold buying on hold for the second month in June, according to official data released on Sunday.
• China, the world's largest gold consumer, kept its gold holdings unchanged for the second consecutive month in June, after 18 months of purchases. These figures indicated that its reserves remained at 72.8 million ounces, valued at roughly $170 billion.
• "This looks like a lot of profit taking, and the equities are strong, and this morning here, which kind of has a little bit of a competing factor with precious metals," said Bob Haberkorn, senior market strategist at RJO Futures.
• Financial markets have priced in a nearly 76% chance of a Fed rate cut in September, up from 71% last Friday, according to the CME FedWatch tool. 
• The US CPI inflation is expected to ease to 3.1% YoY in June from 3.3% in May, while core inflation is estimated to remain steady at 3.4% YoY in the same reported period.

Technical Analysis: Gold price’s bullish bias remains in the longer term

The gold price trades on a positive note on the day. The yellow metal sustains a breakout above a descending trend channel that formed on May 10. According to the daily chart, the precious metal maintains the bullish trend above the key 100-day Exponential Moving Average (EMA), with the 14-day Relative Strength Index (RSI) holding in the bullish zone above the 50-midline. This indicates that the support level is likely to hold rather than break. 

The $2,400 psychological level acts as an immediate resistance level for XAU/USD. The next upside barrier to watch is $2,432 (high of April 12) en route to $2,450 (the all-time high). 

In the bearish event, the first downside target will emerge at $2,340 (former resistance level). Any follow-through selling below this level will pave the way to  $2,273 (100-day EMA).