Gold price (XAU/USD) struggles to capitalize on Friday's positive move and attracts fresh sellers on the first day of a new week. The commodity maintains its offered tone through the Asian session and currently trades below the $2,325 level, down around 0.40% for the day. The Federal Reserve's (Fed) hawkish surprise last week, forecasting only one interest rate cut in 2024, remains supportive of elevated US Treasury bond yields. This allows the US Dollar (USD) to stand tall near its highest level since early May touched on Friday and exerts some downward pressure on the non-yielding yellow metal.
That said, signs of easing inflationary pressures in the United States (US) keep the door open for at least two rate cuts this year, which, in turn, is holding back the USD bulls from placing aggressive bets. Apart from this, persistent geopolitical tensions in the Middle East, along with political uncertainty in Europe, could lend some support to the safe haven Gold price and help limit any further downside. This makes it prudent to wait for strong follow-through selling before positioning for the resumption of the previous metal's recent pullback from the all-time peak, around the $2,350 region touched in May.
From a technical perspective, traders need to wait for a sustained break and acceptance below the $2,300 mark before placing fresh bearish bets around the Gold price. Hence, it will be prudent to wait for some follow-through selling below the $2,285 horizontal support before positioning for any further losses. The commodity might then accelerate the fall towards the next relevant support near the $2,254-2,253 region. The downward trajectory could extend further towards the $2,225-2,220 area en route to the $2,200 round figure.
On the flip side, the 50-day Simple Moving Average (SMA) support breakpoint, currently pegged near the $2,344-2,345 region, is likely to act as an immediate strong barrier. This is followed by the $2,360-2,362 supply zone, which if cleared decisively might prompt some short-covering rally and lift the Gold price to the $2,387-2,388 intermediate hurdle en route to the $2,400 mark. A sustained strength beyond the latter will negate any near-term negative bias and allow the XAU/USD to challenge the all-time peak, around the $2,450 region touched in May.