Gold price comes under some renewed selling amid reduced bets for an early Fed rate cut.

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• Gold price comes under some renewed selling amid reduced bets for an early Fed rate cut.
• Geopolitical risks and the uncertain global economic outlook to limit losses for the XAU/USD.
• Traders might also refrain from placing aggressive directional bets ahead of key US data.

Gold price (XAU/USD) meets with a fresh supply during the Asian session on Wednesday and erodes a part of the overnight modest gains back closer to the $2,040-2,042 supply zone. The precious metal, however, remains confined in a multi-day-old trading range as traders seek clarity over the timing of when the Federal Reserve (Fed) will start cutting interest rates. Hence, the focus will remain glued to this week’s important US macro releases – starting with the flash PMIs later today, followed by the Advance Q4 GDP on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday.

In the meantime, investors have been scaling back their expectations for an early interest rate cut by the Fed in the wake of a resilient US economy. Furthermore, several Fed officials last week emphasized the need for more inflation data before any judgment on interest rates could be made. This, in turn, assists the US Dollar (USD) to stand tall near its highest level since December 13 touched on Tuesday and is seen as a key factor weighing on the Gold price. That said, geopolitical tensions, along with worries about slowing economic growth in China, could lend support to the safe-haven XAU/USD.

From a technical perspective, the $2,022-2,020 region might offer some support to the Gold price ahead of the weekly trough, around the $2,017-2,016 zone touched on Monday. This is followed by over a one-month low, around the $2,000 psychological mark set last week, which if broken decisively will be seen as a fresh trigger for bearish traders. The XAU/USD might then turn vulnerable to accelerate the fall towards the $1,988 intermediate support before eventually dropping to the 100-day Simple Moving Average (SMA), currently around the $1,972 area, en route to and the 200-day SMA, near the $1,964-1,963 region.

On the flip side, any meaningful strength beyond the $2,029-2,030 immediate hurdle might continue to confront stiff resistance near the $2,040-2,042 supply zone. Some follow-through buying, however, might negate the near-term bearish outlook and trigger a short-covering rally. The Gold price might then climb to the $2,077 area before aiming to reclaim the $2,100 round-figure mark.

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