Gold price climbs back closer to over two-week high touched on Wednesday

• Gold price gains positive traction for the fourth successive day on Thursday.
• Sliding US bond yields weigh on the USD and benefit the non-yielding metal.
• Geopolitical risks and China’s economic woes remain supportive of the move.

Gold price (XAU/USD) attracts some buying for the fourth straight day on Thursday and moves back closer to over a two-week high, around the $2,056 area touched the previous day. The US Dollar (USD) struggles to capitalize on Wednesday's post-FOMC bounce from a one-week trough amid a further decline in the US Treasury bond yields. This, along with persistent geopolitical risks stemming from conflicts in the Middle East and China's economic woes, turn out to be a key factor lending some support to the safe-haven commodity. That said, the Federal Reserve's (Fed) less dovish outlook on rates might cap the non-yielding yellow metal.

Investors now look to Thursday's rather busy economic docket, highlighting the release of the flash Eurozone consumer inflation figures and the US ISM Manufacturing PMI, for some meaningful impetus. Furthermore, the Bank of England's (BoE) monetary policy decision might infuse some volatility in the markets. Apart from this, the US bond yields, the USD price dynamics and the broader risk sentiment might contribute to producing short-term trading opportunities around the Gold price. The market focus will then shift to the closely-watched US monthly employment details, popularly known as the Nonfarm Payrolls (NFP) report on Friday.

Daily Digest Market Movers: Gold price draws support from sliding US bond yields, USD downtick and geopolitical risks

• The Federal Reserve signalled on Wednesday that it was getting closer to rate cuts and drags the US Treasury bond yields lower, prompting fresh US Dollar selling and lending support to the Gold price.
• As was expected, the Fed decided to leave the main interest-rate target unchanged at between 5.25%-5.5% at the end of a two-day meeting on Wednesday and indicated that the policy rate is likely at its peak.
• In the post-meeting press conference, Fed Chair Jerome Powell said that rate cuts would likely begin at some point this year, though pushed back strongly against expectations for any such move in March.
• The current market pricing indicates only about a 35% chance that the US central bank will cut interest rates in March, down from more than 60% before the Fed decision and nearly 90% a month ago.
• Investors remain worried that the deepening conflict in the Middle East could trigger a wider war, which, along with slowing economic growth in China, lends support to the safe-haven precious metal.
• The European Union hopes to launch a naval mission in the Red Sea within three weeks to help defend cargo ships against attacks by Houthi rebels, which are hampering trade and driving up prices.
• A private-sector survey released earlier this Thursday showed that business activity in China's manufacturing sector expanded at a steady pace for the third successive month in January.
• Traders look to the flash Eurozone consumer inflation figures, the Bank of England policy decision and the US ISM Manufacturing PMI for some impetus ahead of the US NFP on Friday.

Technical Analysis: Gold price seems poised to appreciate further, $2,040-2,042 strong resistance breakout in play

From a technical perspective, strength beyond the $2,040-2,042 supply zone could be seen as a fresh trigger for bulls. Moreover, oscillators on the daily chart have just started gaining positive traction and support prospects for additional gains. That said, any further move up beyond the overnight swing high, around the $2,056 area, is likely to confront some resistance near the $2,065-2,066 zone ahead of the $2,078-2,079 region or the YTD peak. Some follow-through buying should allow the Gold price to aim back towards reclaiming the $2,100 round figure and climb further towards the next relevant hurdle near the $2,020 area.

On the flip side, the 50-day Simple Moving Average (SMA), currently pegged near the $2,031-2,030 area, now seems to act as an immediate strong support and a key pivotal point. A convincing break below the said support could drag the Gold price to the $2,012-2,010 area en route to the $2,000 psychological mark. Some follow-through selling might shift the bias in favour of bearish traders and expose the 100-day SMA support near the $1,980 region, before the XAU/USD eventually drops to the very important 200-day SMA, near the $1,965-1,964 area.