GOLD PRICE FORECAST: XAU/USD LACKS FIRM INTRADAY DIRECTION, STUCK IN A RANGE AROUND $2,000

Gold price struggles to capitalize on its gains recorded over the past two sessions and seesaws between tepid gains/minor losses on Wednesday. The XAU/USD holds steady around the $2,000 psychological mark through the first half of the European session and is influenced by a combination of diverging forces.

Fresh US Dollar selling lends support to Gold price

The US Dollar (USD) comes under renewed selling pressure and erodes a major part of the overnight gains amid the uncertainty over the Federal Reserve's (Fed) rate-hike path. This, in turn, is seen lending support to the US Dollar-denominated Gold prices. Fresh concerns about the regional banking sector crisis, the possibility of an imminent recession and worries about the debt ceiling in the United States (US) lift bets for an imminent rate cut by the Fed later this year. This led to the overnight slum in the US Treasury bond yields and continues to act as a headwind for the Greenback.

Federal Reserve rate hike bets cap XAU/USD

It is worth recalling that the yield on the benchmark 10-year Treasury yields registered its largest decline since March. That said, the US central bank is still expected to deliver a 25 bps rate hike at the next Federal Open Market Committee (FOMC) monetary policy meeting in May. This, in turn, allows the US bond yields to stage a modest recovery on Wednesday and keeps a lid on any meaningful upside for the non-yielding Gold price. Apart from this, signs of stability in the equity markets further contribute to caping gains for the safe-haven precious metal, at least for the time being.

Traders now eye macro data from United States for fresh impetus

The aforementioned fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the Gold price has formed a near-term bottom around the $1,970 area and positioning for any further gains. Market participants now look forward to the US economic docket, featuring the release of the Durable Goods Orders data later during the early North American session. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader risk sentiment might provide some impetus to the Gold price.

Focus remains on US Q1 GDP and US PCE Price Index

The focus, however, remains glued to the release of the first-quarter US Gross domestic product (GDP) report on Thursday. This will be followed by the US Core  Personal Consumption Expenditure (PCE) Price Index - the Fed's preferred inflation gauge - on Friday, which will help determine the near-term trajectory for the Greenback and the Gold price. In the meantime, the XAU/USD is more likely to extend its sideways consolidative price moves and remain confined in a familiar trading band held over the past one-and-half-week or so.