Gold price manages to hold above $2,300 mark amid mixed fundamental cues

• Gold price consolidates above $2,300 and is influenced by a combination of diverging forces.
• A hawkish shift in the Fed’s interest rate projections acts as a headwind for the yellow metal.
• Signs of easing inflation keep hopes alive for a September rate cut and offer some support.

Gold price (XAU/USD) ended in the red on Thursday for the first time in four days, although it showed some resilience below the $2,300 round-figure mark and held steady above the said handle during the Asian session on Friday. Any meaningful upside, however, seems elusive on the back of the Federal Reserve's (Fed) hawkish surprise on Wednesday. In fact, policymakers, in the so-called "dot plot", indicated only one interest rate cut in 2024. This remains supportive of some follow-through US Dollar (USD) buying and should cap gains for the non-yielding yellow metal.

Apart from this, the underlying bullish sentiment across the global equity markets should act as a headwind for the safe-haven Gold price. That said, persistent geopolitical tensions in the Middle East and renewed political uncertainty in Europe keep a lid on the optimism, lending some support to the precious metal. Furthermore, market participants are still pricing in a greater chance that the Fed could implement its first rate cut as soon as September in the wake of signs of cooling inflationary pressures. This should further contribute to limiting the downside for the XAU/USD. 

Daily Digest Market Movers: Gold price bulls seem non-committed amid the post-Fed USD strength

• The Federal Reserve projected only one rate cut in 2024 as compared to three cuts estimated at the March meeting, which is seen underpinning the US Dollar and acting as a headwind for the non-yielding Gold price. 
• This week’s softer inflation figures, however, suggest that the Fed could lower borrowing costs earlier than expected, with the CME Group’s FedWatch Tool indicating a greater chance of the first rate cut in September. 
• The data published by the US Bureau of Labor Statistics on Thursday showed that the Producer Price Index (PPI) for final demand rose by 2.2% on a yearly basis in May, lower than the 2.3% previous and 2.5% expected.
• Adding to this, the annual core PPI rose 2.3% during the reported month, below April's increase and the market expectation of 2.4%. On a monthly basis, the PPI declined 0.2%, while the core PPI remained unchanged.
• This comes on top of Wednesday's softer CPI report, which showed that consumer prices were unchanged in May for the first time since last June and the yearly rate edged down to 3.3% from the 3.4% recorded in April. 
• Separately, the US Department of Labor (DoL) reported that the number of Americans who filed for unemployment insurance for the first time increased more than anticipated, to 242K last week from the 229K previous.
• Meanwhile, a snap election call in France sparked wider political concerns and should limit losses for the safe-haven XAU/USD against the backdrop of Russia’s ongoing war in Ukraine and conflict in the Middle East.
• Investors now look to the Preliminary release of the Michigan US Consumer Sentiment Index, which could influence the USD price dynamics and produce short-term trading opportunities on the last day of the week.

Technical Analysis: Gold price needs to break below $2,285 support for bears to seize near-term control

From a technical perspective, the post-FOMC rejection near the 50-day Simple Moving Average (SMA) and negative oscillators on the daily chart favor bearish traders. That said, failure to find acceptance below the $2,300 mark warrants some caution. Hence, it will be prudent to wait for some follow-through selling below the $2,285 horizontal support before positioning for any further losses. The Gold price might then accelerate the fall towards the next relevant support near the $2,254-2,253 region. The downward trajectory could extend further towards the $2,225-2,220 area en route to the $2,200 round figure.

On the flip side, any meaningful recovery is likely to confront resistance near the $2,325 area. This is followed by the 50-day SMA support-turned-resistance, currently pegged near the $2,345 region and the $2,360-2,362 supply zone. A sustained strength beyond the latter should allow the Gold price to retest last week’s swing high, around the $2,387-2,388 area, and aim to reclaim the $2,400 mark. Some follow-through will negate any near-term negative bias and allow the XAU/USD to challenge the all-time peak, around the $2,450 region touched in May.