Gold price draws some support from escalating geopolitical tensions in the Middle East.

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• Gold price draws some support from escalating geopolitical tensions in the Middle East.
• Sliding US bond yields also benefit the XAU/USD, though a bullish USD caps the upside.
• Traders also seem reluctant ahead of the crucial two-day FOMC monetary policy meeting.

Gold price (XAU/USD) kicks off the new week on a positive note, albeit struggles to build on strength and remains below the 50-day Simple Moving Average (SMA) during the Asian session. Traders now seem reluctant and opt to wait for more cues about the timing of when the Federal Reserve (Fed) will start cutting interest rates before placing fresh directional bets. Hence, the focus will remain glued to the outcome of the highly-anticipated two-day FOMC monetary policy meeting starting on Tuesday.

In the meantime, the killing of three US Army soldiers in a drone attack by radical Iran-backed militant groups raises the risk of a major escalation of geopolitical tensions in the Middle East. Adding to this, a generally weaker tone around the equity markets should act as a tailwind for the safe-haven Gold price. That said, diminishing odds for a more aggressive policy easing by the Fed act as a tailwind for the US Dollar (USD) and hold back bulls from placing aggressive bets around the XAU/USD.

From a technical perspective, any subsequent move beyond the 50-day SMA hurdle, currently around the $2,027-2,028 region, might continue to attract some sellers near the $2,040-2,042 supply zone. A sustained strength beyond the latter could trigger a short-covering rally and lift the Gold price further to the $2,077 intermediate hurdle en route to the $2,100 round-figure mark.

On the flip side, immediate support is pegged near the $2,012-2,010 area ahead of the $2,000 psychological mark. Some follow-through selling will be seen as a fresh trigger for bearish traders and expose the 100-day SMA, currently near the $1,977-1,976 area. The Gold price could eventually drop to test the very important 200-day SMA, near the $1,964-1,963 region.

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