Gold price consolidates its recent recovery gains; US PPI and FOMC minutes awaited

• Gold price extends its consolidative price move through the Asian session on Wednesday.
• Reduced bets for more rate hikes by the Fed and geopolitical tensions lend some support.
• Investors await fresh cues about the Fed’s rate-hike path before placing directional bets.

Gold price (XAU/USD) seesawed between tepid gains/minor losses on Tuesday and consolidated its strong recovery gains from the $1,810 area, or a seven-month low touched last week. The precious metal, however, manages to hold above the $1,850 level and extends the sideways price move during the Asian session on Wednesday.

Traders now seem reluctant to place aggressive directional bets around the Gold price and prefer to wait for fresh cues about the Federal Reserve's (Fed) future rate-hike path. The United States (US) Nonfarm Payrolls (NFP) report released on last Friday showed that wage growth remained moderate in September and eased inflationary concerns. This, along with recent dovish remarks by several Fed officials, supports prospects for an eventual shift in the central bank's policy stance.

Furthermore, the Israel-Gaza conflict is seen lending some support to the safe-haven Gold price. The markets, meanwhile, are still pricing in the possibility of at least one rate hike by the end of this year. This, along with a generally positive tone around the equity markets, might keep a lid on any further gains for the precious metal. Traders now look to Wednesday's release of the US Producer Price Index (PPI) and the FOMC minutes for some impetus ahead of the US CPI on Thursday.

Daily Digest Market Movers: Gold price extends its consolidative price move above $1,850

• Gold price continues to draw support from reduced bets for further interest rate hikes by the Federal Reserve and geopolitical tensions in the Middle East.
• Atlanta Fed President Raphael Bostic said on Tuesday that the US central bank does not need to raise rates any further to get inflation back to the 2% target.
• Minneapolis Fed President Neel Kashkari added that the recent rise in long-term Treasury bond yields could aid the central bank in its battle against inflation.
• The repricing of the Fed's rate-hike path leads to a further decline in the US bond yields and continues to weigh the US Dollar (USD), benefitting the XAU/USD.
• The expansion of the Israel-Gaza conflict to the wider Middle East would push Crude Oil prices higher and complicate the Fed's effort to reduce inflation.
• This might force the US central bank to stick to its hawkish stance and add another layer of complexity, making a soft landing more difficult to achieve.
• Investors now look to the US PPI and the FOMC minutes for cues about the Fed’s future rate-hike path ahead of the consumer inflation figures on Thursday.

Technical Analysis: Gold price needs to make it through the $1,865 hurdle to attract fresh buyers

From a technical perspective, momentum beyond the overnight swing high, around the $1,865-1,866 region, has the potential to lift the XAU/USD to the next relevant hurdle near the $1,885 region. This is closely followed by the $1,900 round figure, which nears the 50-day Simple Moving Average (SMA) and should now act as a key pivotal point. Some follow-through buying should allow the Gold price to climb further towards testing the 200-day SMA, currently pegged near the $1,928-1,930 region.

On the flip side, the $1,850 level might continue to protect the immediate downside ahead of a multi-day-old trading range resistance breakpoint, around the $1,835-1,833 region. Failure to defend the said support levels might prompt some technical selling and drag the Gold price to the $1,820 support en route to the multi-month low, around the $1,810 zone. A convincing break below the latter will validate a bearish death cross on the daily chart, wherein the 50-day SMA is holding well below the 200-day SMA, and pave the way for a further drop.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).