GOLD PRICE PULLS BACK FROM MULTI-MONTH PEAK, DOWNSIDE POTENTIAL SEEMS LIMITED

• Gold price edges lower and snaps a four-day winning streak to a three-month peak.
• Bets for a June Fed rate cut keep the USD bulls on the defensive and lend support.
• Geopolitical tensions could also help limit the downside for the safe-haven metal.

Gold price (XAU/USD rallied to a three-month peak on Monday and settled at an all-time high, above the $2,100 mark amid bets that the Federal Reserve (Fed) will start cutting interest rates in June. Apart from this, a further escalation of geopolitical tensions in the Middle East turns out to be another factor underpinning the safe-haven precious metal. Bulls, however, opt to take some profits off the table during the Asian session on Tuesday and wait for more cues about the Fed's rate-cut path before positioning for any further appreciating move. Hence, the focus remains on Fed Chair Jerome Powell's semi-annual congressional testimony on Wednesday and Thursday.

Apart from this, this week's important US macro releases, including the closely watched Nonfarm Payrolls (NFP) on Friday, will play a key role in determining the next leg of a directional move for the non-yielding Gold price. In the meantime, subdued US Dollar (USD) price action, along with the prevalent cautious mood across the global equity markets, might continue to act as a tailwind for the XAU/USD. Nevertheless, the precious metal, for now, seems to have snapped a four-day winning streak. That said, the aforementioned fundamental backdrop warrants some caution before confirming a near-term top and positioning for any meaningful corrective decline.