Gold price remains depressed amid modest USD strength, holds above $2,400 mark

• Gold price kicks off the new week on a weaker note amid the emergence of some USD buying.
• Bets that the Fed will cut rates in September should cap the USD gains and lend some support.
• The US political uncertainty after Trump's assassination attempt also warrants caution for bears.

Gold price (XAU/USD) struggles to capitalize on Friday's goodish rebound from the $2,391 area and kicks off the new week on a weaker note. This marks the second straight day of a downtick and is sponsored by a modest US Dollar (USD) strength, which tends to undermine demand for the USD-denominated commodity. The precious metal, however, remains close to its highest level since May 22 touched last Thursday and might continue to draw support from a combination of factors, warranting some caution for aggressive bearish traders. 

Softer consumer inflation figures released from the US last week reaffirmed market bets that the Federal Reserve (Fed) will start cutting interest rates in September and lower borrowing costs again in December. This might hold back the USD bulls from placing aggressive bets and lend some support to the non-yielding Gold price. Furthermore, an alleged assassination attempt on former US President Donald Trump fuels political uncertainty and should further contribute to limiting any meaningful downside for the safe-haven XAU/USD. 

Daily Digest Market Movers: Gold price is weighed down by a stronger USD, Fed rate cut bets to limit losses

• The US Dollar attracts some buyers on Monday and reverses a part of its recent losses to over a three-month low, which, in turn, is seen exerting some pressure on the Gold price for the second straight day.
• Data published by the US Bureau of Labor Statistics on Friday showed that the Producer Price Index (PPI) for final demand rose by 2.6% on a yearly basis in June, above consensus estimates for a reading of 2.3%.
• Adding to this, political uncertainty in the wake of a failed assassination attempt on US Presidential candidate Donald Trump benefits the Greenback, though dovish Federal Reserve expectations might cap gains.
• The current market pricing indicates over a 90% chance that the Fed will start its rate-cutting cycle in September and the bets were lifted by another tame US consumer inflation report released last Thursday.
• Furthermore, the US political situation should keep investors' appetite for riskier assets largely in check and lend some support to the safe-haven XAU/USD, warranting caution before positioning for deeper losses. 
• Traders now look to the release of the Empire State Manufacturing Index from the US for short-term opportunities ahead of Fed Chair Jerome Powell's speech later during the North American session.

Technical Analysis: Gold price bulls have the upper hand, could aim to challenge the all-time peak touched in May

From a technical perspective, the emergence of some dip-buying on Friday reaffirmed strong support near the $2,390-2,388 resistance breakpoint. Moreover, oscillators on the daily chart are holding in positive territory and are still away from being in the overbought zone. This, in turn, suggests that the path of least resistance for the Gold price is to the upside. Hence, a slide back below the $2,400 mark might still be seen as a buying opportunity and remain limited.

Some follow-through selling, however, has the potential to drag the Gold price to the $2,358 region with some intermediate support near the $2,372-2,371 area. The subsequent fall might expose the 50-day Simple Moving Average (SMA) support, currently pegged near the $2,350 region. 

On the flip side, last week's swing high, around the $2,425 region now seems to act as an immediate hurdle, above which the Gold price is more likely to aim back towards challenging the all-time peak, around the $2,450 region touched in May. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and set the stage for an extension of the commodity's recent move-up witnessed over the past two weeks or so.