Gold price struggles to gain any meaningful traction and oscillates in a range on Tuesday.

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• Gold price struggles to gain any meaningful traction and oscillates in a range on Tuesday.
• The uncertainty over the timing of the first Fed rate cut caps the upside for the XAU/USD.
• Geopolitical tensions, along with sliding US bond yields, lend support ahead of the FOMC.

Gold price (XAU/USD) fails to capitalize on the previous day’s strength beyond the 50-day Simple Moving Average (SMA) and oscillates in a narrow trading band during the Asian session on Tuesday. The precious metal remains below the $2,040-2,042 supply zone and well within a familiar trading band as traders seek more clarity 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, scheduled to be announced on Wednesday.

Heading into the key central bank event risk, investors continue scaling back their expectations for a more aggressive Fed policy easing in 2024 in the wake of a still-resilient US economy. This, in turn, is seen as a key factor acting as a headwind for the non-yielding Gold price, though declining US Treasury bond yields offer support. This, along with the escalating Middle East crisis, should help limit the downside for the safe-haven metal. Traders now look to the Prelim GDP prints from the Eurozone and the US macro data – the Conference Board’s Consumer Confidence Index and JOLTS Job Openings – for some impetus.

From a technical perspective, bulls might still wait for a sustained move beyond the $2,040-2,042 supply zone before placing fresh bets and positioning for any further gains. Given that oscillators on the daily chart have just started moving into the positive territory, the Gold price could then climb to the $2,077 resistance zone before aiming to reclaim the $2,100 round-figure mark.

On the flip side, the overnight swing low, around the $2,020-2,019 area, now seems to protect the immediate downside ahead of the $2,012-2,010 zone and the $2,000 psychological mark. A convincing break below the latter will be seen as a fresh trigger for bearish traders and expose the 100-day SMA, currently near the $1,978-1,977 region. The Gold price could eventually drop to the very important 200-day SMA, near the $1,964 region.

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