Gold price ticks lower on Monday amid hawkish Fed expectations and a positive risk tone.
A modest USD downtick helps limit the downside amid persistent geopolitical tensions.
Traders also seem reluctant ahead of the FOMC meeting and key US macro data this week.
Gold price (XAU/USD) meets with some supply during the Asian session on Monday and erases a major part of its modest gains registered over the past two days. The US Personal Consumption Expenditures (PCE) Price Index released on Friday reaffirmed expectations that the Federal Reserve (Fed) will keep interest rates higher for longer, which, in turn, is seen driving flows away from the non-yielding yellow metal. Apart from this, a generally positive tone around the equity markets further contributes to the offered tone surrounding the safe-haven commodity, though the downside potential seems limited.
The US Dollar (USD) struggles to build on Friday's goodish bounce from a two-week low and kicks off the new week on a softer note, lending some support to the Gold price. Moreover, the Israel-Hamas conflict in the Gaza Strip, so far, has shown no signs of de-escalation. This, along with the protracted Russia-Ukraine war, keeps geopolitical risks in play and might continue to act as a tailwind for the XAU/USD. Traders might also prefer to wait for the outcome of the crucial two-day FOMC meeting on Wednesday and important US macro releases, including the Nonfarm Payrolls (NFP) report on Friday.
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