Gold price consolidates in a range around $2,170 level, bullish potential seems intact

• Gold price struggles to gain any meaningful traction, though the downside seems cushioned.
• The Fed projected three rate cuts in 2024, which undermines the USD and continues to lend support.
• Tuesday’s US macro data to provide some impetus ahead of the US PCE Price Index on Friday.

Gold price (XAU/USD) struggles to capitalize on the previous day's modest gains and oscillates in a narrow band around the $2,170 level during the Asian session on Tuesday. Meanwhile, the fundamental backdrop warrants some caution before placing aggressive bearish bets around the precious metal and positioning for an extension of the recent sharp pullback from a record peak near the $2,223 region touched last Thursday.

The Federal Reserve (Fed) last week projected a less restrictive monetary policy going forward and signaled that it remains on track to cut interest rates by 75 basis points this year. This, in turn, keeps the US Dollar (USD) bulls on the defensive and acts as a tailwind for the non-yielding Gold price. Apart from this, rising geopolitical tensions further seem to underpin the safe-haven XAU/USD and should help limit any meaningful slide.

Daily Digest Market Movers: Gold price continues to draw support from rising Fed rate cut bets

• Traders are pricing in a 70% probability that the Federal Reserve will start cutting rates in June, which keeps the US Dollar bulls on the defensive and acts as a tailwind for the non-yielding Gold price.
• Several Fed officials, however, expressed concern about still-sticky inflation and stronger-than-expected US macro data, helping limit USD losses and capping the precious metal's upside.
• Atlanta Fed President Raphael Bostic said on Monday that he expects the US economy and inflation to slow gradually and anticipates the US central bank to lower the policy rate only once this year.
• Chicago Fed President Austan Goolsbee noted that three cuts in 2024 were in line with his thinking, though the US central bank needs to see progress in inflation and strike a balance with its dual mandate.
• Separately, Fed Governor Lisa Cook said that inflation has fallen considerably, though the path of disinflation, as expected, has been bumpy and uneven, while the labor market has remained strong.
• Traders look to Tuesday's US economic docket – featuring Durable Goods Orders, Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index – for some impetus.
• The market focus, however, will remain glued to the US Personal Consumption Expenditures (PCE) Price Index data, or the Fed's preferred inflation gauge scheduled for release on Friday.
• In the meantime, geopolitical risks stemming from the protracted Russia-Ukraine war and concerns about whether the UN resolution will lead to an actual ceasefire in the Gaza Strip could underpin the XAU/USD.

Technical Analysis: Gold price seems poised to climb further, $2,147-2,146 holds the key for bulls

From a technical perspective, weakness below the overnight swing low, around the $2,164-2,163 region, is likely to find some support near the $2,156-2,155 area ahead of the $2,147-2,146 horizontal zone. A convincing break below the latter could drag the Gold price further towards the next relevant support near the $2,128-2,127 zone en route to the $2,100 round figure.

Meanwhile, the Relative Strength Index (RSI) on the daily chart has eased from the overbought territory and favours bullish traders. That said, the $2,200 psychological mark could act as an immediate strong barrier hurdle, above which a fresh bout of technical buying should lift the Gold price towards the record high, around the $2,223 zone touched last Thursday.