Gold price hangs near its lowest levels since March on stronger USD and higher yields

• Gold price enters a bearish consolidation phase near a multi-month low touched on Wednesday.
• The prevalent risk-off environment is seen lending some support to the safe-haven XAU/USD.
• Bullish USD and elevated US Treasury bond yields should keep a lid on any recovery move.

Gold price (XAU/USD) plunged to a six-and-half-month low, around the $1,873-1,872 region on Wednesday and registered its biggest single-day fall in two months. The precious metal remains on the defensive through the Asian session on Thursday and seems vulnerable to prolonging its rejection slide from a technically significant 200-day Simple Moving Average (SMA) tested last week.

A strong bullish sentiment surrounding the US Dollar (USD), along with elevated US Treasury bond yields, might continue to drive flows away from the Gold price. Rising bets for at least one more rate hike by the Federal Reserve (Fed) in 2023 act as a tailwind for the US bond yields and boost the USD. That said, the prevalent risk-off environment could lend some support to the safe-haven Gold price. This, along with the risk of a partial US government shutdown, might hold back traders from placing fresh bets around the XAU/USD. 

Traders now look to the final US Q2 GDP print for some impetus later during the early North American session. The focus, however, will remain on the US Core PCE Price Index on Friday, which will provide fresh cues about the Fed's future interest rate-hike path and provide a fresh directional impetus to the non-yielding Gold price. 

Daily Digest Market Movers: Gold price hovers near multi-month low on stronger USD, higher US bond yields

• Gold price registered its biggest single-day fall in two months on Wednesday and seems vulnerable to slide further.
• Hawkish comments by Minneapolis Fed President Neel Kashkari lift bets for at least one more rate hike in 2023.
• The better-than-expected US Durable Goods Orders ensure that the Fed will keep interest rates higher for longer. 
• The US Dollar stands tall near a 10-month high, while the 10-year US Treasury yields flirt with a 16-year peak.
• Bullish USD and elevated US bond yields might continue to undermine demand for non-yielding yellow metal.
• Investors remain worried about China's property sector and headwinds stemming from rising borrowing costs.
• Republican US House Speaker Kevin McCarthy on Wednesday rejected a stopgap funding bill advancing in the Senate, bringing the government closer to its fourth partial shutdown in a decade.
• The risk-off impulse might hold back bears from placing fresh bets around the Gold price and help limit losses.
• Traders now look to the final US Q2 GDP, though the focus remains on the US Core PCE Price Index on Friday.

Technical Analysis: Gold price might consolidate before the next leg down

From a technical perspective, the subdued range-bound price action might be categorized as a bearish consolidation phase. Moreover, the lack of any buying interest suggests that the path of least resistance for the Gold price remains on the downside. That said, the Relative Strength Index (RSI) on the daily chart has just started drifting in the oversold zone and warrants some caution. Hence, it will be prudent to wait for some near-term consolidation or a modest rebound before traders start positioning for a further depreciating move. Nevertheless, the XAU/USD seems poised to test the next relevant support near the $1,860-1,858 region before eventually dropping to the $1,820 level.