Gold price sticks to US politics-inspired modest intraday gains above $2,400 mark

• Gold price attracts some buyers and snaps a three-day losing streak amid modest USD weakness.
• The US political development prompts some unwinding of the ‘Trump trade’ and weighs on the buck.
• September Fed rate cut bets further undermine the USD and benefit the non-yielding XAU/USD.

Gold price (XAU/USD) gains some positive traction during the Asian session on Monday and for now, seems to have stalled a three-day-old corrective decline from the all-time peak touched last week. Against the backdrop of bets for an imminent start of the Federal Reserve's (Fed) rate-cutting cycle in September, the US political development over the weekend prompts fresh selling around the US Dollar (USD) and benefits the precious metal. 

Apart from this, worries about the US-China trade battle, along with geopolitical risks stemming from the protracted Russia-Ukraine war and the ongoing conflicts in the Middle East, turn out to be another factor lending support to the safe-haven Gold price. The uptick, however, lacks bullish conviction as investors seem reluctant and prefer to wait for more insights about the Fed's policy path before positioning for the next leg of a directional move. 

Daily Digest Market Movers: Gold price draws support from US politics, Fed rate cut bets and softer USD

• A combination of supporting factors assists the Gold price to attract some buyers on the first day of a new week and snap a three-day losing streak to sub-$2,400 levels, or a one-week low touched on Friday.
• The US Dollar comes under renewed selling pressure in reaction to US President Joe Biden's exit from the presidential race on Sunday, which prompts investors to unwind some trades betting on a Trump victory. 
• Vice President Kamala Harris solidified her position as the leading Democratic candidate in the Presidential race, though former President Donald Trump still remains a favorite in the betting market.
• Market participants, meanwhile, have fully priced in a September interest rate cut by the Federal Reserve, which contributes to keeping the USD bulls on the defensive and lends support to the XAU/USD. 
• That said, the underlying bullish tone across the global equity markets cap gains for the safe-haven commodity as traders look to the US Personal Consumption Expenditures (PCE) Price Index data on Friday.
• The crucial inflation data will influence expectations about the Fed's rate-cut path, which, in turn, will drive USD demand in the near term and provide a fresh directional impetus to the commodity.
• Furthermore, this week's release of flash PMIs should provide cues about the health of the global economy and provide some impetus to the metal, allowing traders to grab short-term opportunities.

Technical Analysis: Gold price needs to break below the $2,390-2,385 confluence for bears to seize control

From a technical perspective, last week's corrective slide from the all-time peak stalled ahead of the $2,390-2,385 horizontal support. The said area coincides with the 50% retracement level of the June-July rally and the 100-period Simple Moving Average (SMA) on the 4-hour chart, which, in turn, should now act as a key pivotal point for short-term traders. A convincing break below is likely to pave the way for deeper losses and drag the Gold price to 61.8% Fibo. level, around the $2,366-2,365 region, en route to the $2,352-2,350 zone. Some follow-through selling will expose the 78.6% Fibo. level, near the $2,334-2,334 area, before the XAU/USD eventually drops to the $2,300 mark.

On the flip side, any subsequent move up is likely to confront some resistance near the $2,417-2,418 zone, above which a bout of a short-covering has the potential to lift the Gold price to the $2,437-2,438 region. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and set the stage for a move towards challenging the all-time peak, around the $2,482 area touched on July 17, with some intermediate resistance near the $2,458 region.