Gold price uptrend continues as traders anticipate upcoming Fed decision

• Gold continues its three-day rally, buoyed by falling US Treasury yields and a weakening US Dollar.
• Recent US economic data, including underperforming GDP and stable core PCE inflation rates, increasing expectations for Fed holding rates.
• Attention now turns to the US Federal Reserve's monetary policy decision on May 1 and forthcoming Nonfarm Payrolls data.

Gold's price extends its gains for the third straight day, yet it remains within familiar levels, with traders bracing for the US Federal Reserve’s (Fed) monetary policy decision on May 1. Last week, data from the United States (US) showed that Gross Domestic Product (GDP) missed the mark, while the Fed’s preferred gauge for inflation, the Core Personal Consumption Expenditure Price Index (PCE), stalled for the second straight month at 2.8% YoY.

The XAU/USD bounces off daily lows of $2,320 and trades at $2,340, courtesy of an improvement in risk appetite, lower US Treasury yields, and a weak US Dollar (USD). The Fed is expected to keep interest rates on hold following Fed Chairman Jerome Powell’s remarks in which he said the current monetary policy stance is appropriate due to the lack of progress on curbing inflation. Besides that, Investors will be eyeing the release of US Nonfarm Payrolls figures on Friday.

Daily digest market movers: Gold price climbs amid tumbling US yields

• Gold’s gains are sponsored by the drop in US Treasury yields and a soft US Dollar. The US 10-year Treasury bond yield dropped five basis points (bps) to 4.612%, a tailwind for the non-yielding metal. At the same time, the Greenback, as measured by the US Dollar Index (DXY), surrendered below 106.00, falling 0.43% to trade at 105.63.
• Last week’s softer than expected Gross Domestic Product (GDP) was overshadowed by the jump in the core Personal Consumption Expenditure Price Index (PCE) for Q1 2024 to 3.7%. Even though that spooked investors to price out the Federal Reserve’s interest rate cuts for 2024, the monthly reading of the core PCE at 2.8% YoY relieved traders, sparking an improvement in market mood. 
• On May 3, the US Bureau of Labor Statistics (BLS) is expected to reveal April’s Nonfarm Payrolls figures, which are expected to come at 243K, below March’s 303K. The Unemployment Rate is estimated to stay unchanged at 3.8%, while Average Hourly Earnings (AHE) would likely remain unchanged at 0.3% MoM.
• Data from the Chicago Board of Trade (CBOT) suggests that traders expect the fed funds rate to finish 2024 at 5.035%, down from 5.050% last Friday.

Technical analysis: Gold price consolidates around $2,330

Gold price remains upwardly biased, though to extend its gains, buyers need to reclaim the April 26 high of $2,352, so they can remain hopeful of challenging higher prices. The next resistance would be the $2,400 mark, followed by the April 19 high at $2,417 and the all-time high of $2,431.

On the flip side, if the XAU/USD price dips below the April 15 daily low of $2,324, that would pave the way to test $2,300. A breach of the latter would expose the April 23 low of $2,229, followed by the March 21 high at $2,222.