Gold price attracts some dip-buying in the vicinity of the very important 200-day Simple Moving Average (SMA) support during the Asian session on Tues
day and stalls the overnight pullback from the $1,930 area, or a four-day high. The XAU/USD currently trades around the $1,923 region, up slightly for the second successive day, though lacks bullish conviction as traders keenly await this week's release of the latest consumer inflation figures from the United States on Wednesday. will provide fresh cues about the Federal Reserve's future rate hike path after the widely anticipated pause in September.
The expectations were lifted by the upbeat US macro data released last week, which pointed to a resilient economy and should allow theto keep interest rates higher for longer. The hawkish outlook remains supportive of elevated US Treasury bond yields and had pushed the US Dollar to a six-month top last week. The Greenback, however, witnessed some profit-taking on Monday and languished near a multi-day low on Tuesday, lending some support to the Gold price.
Adding to this, the prevalent cautious mood around the equity markets is seen as another factor underpinning the precious metal's safe-haven status. Market participants remain concerned about the worsening economic conditions in China - the world's second-largest economy. This, along with worries about headwinds stemming from rapidly rising borrowing costs, tempers investors' appetite for riskier assets and drives some haven flows towards the Gold price.
Traders, however, seem reluctant to place aggressive bullish bets and prefer to wait on the sidelines ahead of the US CPI report. This, along with the highly-anticipated European Central Bank meeting on Thursday, should provide a fresh impetus to the Gold price.
. This, in turn, makes it prudent to wait for strong follow-through buying before positioning for the resumption of the recent recovery from the $1,885 region, or over a five-month trough touched in August.