Gold price advances to two-week top, beyond $2,450 as Fed hinted September rate cut

• A combination of supporting factors pushes the Gold price to a two-week high on Thursday. 
• The Fed’s dovish stance drags the US bond yields lower and continues to weigh on the USD. 
• The risk-on mood might hold back bulls from placing fresh bets ahead of the US NFP on Friday.

Gold price (XAU/USD) gained strong positive traction on Wednesday after the Federal Reserve (Fed) opened the door to reducing borrowing costs as soon as September. The US Treasury bond yields tumbled across the board after the Fed decision, dragging the US Dollar (USD) to its lowest level since July 18 and benefiting the non-yielding yellow metal. Apart from this, the risk of a further escalation of geopolitical tensions in the Middle East pushes the safe-haven commodity to a two-week high during the Asian session on Thursday.

Meanwhile, the prospects for an imminent start of the Fed's policy-easing cycle trigger a fresh leg up in the equity markets and might act as a headwind for the Gold price during the Asian session on Thursday. Nevertheless, the fundamental backdrop seems tilted firmly in favor of bullish traders and suggests that the path of least resistance for the XAU/USD is to the upside. As investors digest the Fed rate decision, the focus shifts to the release of the US monthly employment data or the Nonfarm Payrolls (NFP) report on Friday. 

Daily Digest Market Movers: Gold price draws support from the post-FOMC slide in the US bond yields and the USD

• The Federal Reserve decided to hold its benchmark interest rate steady in the 5.25%-5.50% range while acknowledging the recent progress on inflation and cooling in the labor market.
• Furthermore, Fed Chair Jerome Powell, speaking at the post-meeting press conference, signaled the likelihood of a rate cut in September if inflation stays in line with expectations.
• This comes on top of the disappointing release of the ADP report, which indicated a slowing in the labor market and wage growth, giving the Fed another reason to cut rates this year. 
• The Automatic Data Processing (ADP) reported that private sector employment in the US rose 122K in July against the 150K expected and annual pay was up 4.8% year-over-year.
• The yield on the 10-year US government bond dived to its lowest level since February in reaction to the weak data and the Fed's dovish outlook, prompting aggressive US Dollar selling. 
• Apart from this, geopolitical risks stemming from the ongoing conflicts in the Middle East further underpin demand for the safe-haven Gold price and lift it to a fresh two-week high on Thursday.
• The upside for the XAU/USD, however, could be limited by the risk-on impulse as traders now look to Friday's release of the US Nonfarm Payrolls report for some meaningful impetus.

Technical Analysis: Gold price could aim to retest the all-time peak, around the $2,483-2,484 region touched in July

From a technical perspective, the overnight breakout through the $2,412-2,413 horizontal resistance comes on the back of the recent bounce from the 50-day Simple Moving Average (SMA) support. Moreover, the subsequent move beyond the $2,450 level, along with the fact that oscillators on the daily chart have been gaining positive traction, validates the near-term bullish outlook for the Gold price. Hence, some follow-through strength towards the next relevant hurdle near the $2,468-2,469 region, en route to the $2,483-2,484 zone, or the all-time peak touched in July, looks like a distinct possibility. The latter is followed by the $2,500 psychological mark, which if cleared decisively will be seen as a fresh trigger for bullish traders and pave the way for additional near-term gains.

On the flip side, the Asian session low, around the $2,443 area, now seems to protect the immediate downside ahead of the $2,432 region. Any further downfall could now be seen as a buying opportunity and remain limited near the $2,413-2,412 resistance breakpoint. That said, some follow-through selling, leading to a breakdown through the $2,400 mark, could make the Gold price vulnerable to test the $2,384-2,383 support zone. The downward trajectory could extend further towards challenging the 50-day SMA, currently pegged near the $2,363 region, en route to the $2,353 area, or last week's swing low.