Gold price edges higher ahead of Fed Chair Powell’s second testimony

• 
  The
  Gold
  price
  holds
  positive
  ground
  in
  Wednesday’s
  early
  Asian
  session. 
• 
  Rising
  Fed
  rate
  cut
  bets
  continue
  to
  lift
  the
  yellow
  metal. 
• 
  The
  PBoC
  refrained
  from
  buying
  gold
  for
  a
  consecutive 
  month,
  limits
  XAU/USD
  upside. 

The
Gold
price
(XAU/USD)
trades
with
mild
gains
on
Wednesday
during
the
early
Asian
session.
The
growing
speculation
that
the
US
Federal
Reserve
(Fed)
is
likely
to
start
cutting
rates
as
early
as
September
continues
to
support
the
non-yielding
metal.
Furthermore,
political
uncertainties
within
Europe
and
globally
might
boost
Gold
price,
a
traditional
safe-haven
asset.

On
the
other
hand,
the
pause
of
China’s
central
bank
Gold
purchases
for
a
second
consecutive
month
might
prompt
traders
to
reduce
bullish
bets
in
the
yellow
metal
as
China
is
the
world’s
largest
gold
consumer.
Investors
will
keep
an
eye
on
the
second
semi-annual
testimony
by

Federal
Reserve
(Fed)
Chair
Jerome
Powell
on
Wednesday,
along
with
speeches
by
the
Fed’s
Michelle
Bowman
and
Austan
Goolsbee.
On
Thursday,
the
US
Consumer
Price
Index
(CPI)
inflation
data
will
be
closely
monitored.
This
data
might
offer
more
clarity
on
the
US
interest
rate
path.

Daily
Digest
Market
Movers:
Gold
price
gains
ground
amid
rising
Fed
rate
cut
bets

• China
  held
  its
  gold
  reserves
  steady
  for
  the
  second
  month
  in
  a
  row
  in
  June,
  after
  an
  18-month
  period
  of
  purchases.
  Official
  data
  from
  China’s
  central
  bank
  shows
  its
  gold
  reserves
  holdings
  at
  2,264
  tonnes.
• Federal
  Reserve
  (Fed)
  Chair
  Jerome
  Powell
  said
  in
  testimony
  Tuesday
  to
  Congress
  that
  the
  most
  recent
  inflation
  data
  showed
  some
  modest
  further
  progress
  and
  “more
  good
  data”
  could
  open
  the
  door
  to
  interest
  rate
  cuts. 
• Powell
  emphasized
  that
  the
  central
  bank
  will
  continue
  to
  make
  decisions
  on
  monetary
  policy
  meeting
  by
  meeting,
  adding
  that
  holding
  interest
  rates
  too
  high
  for
  too
  long
  could
  jeopardize
  economic
  growth. 
• Powell
  further
  stated
  that
  inflation
  readings
  over
  the
  first
  three
  months
  of
  this
  year
  did
  not
  boost
  Fed
  officials’
  confidence
  that
  inflation
  was
  coming
  under
  control.
• Financial
  markets
  are
  now
  pricing
  in
  74%
  odds
  of
  a
  Fed
  rate
  cut
  in
  September,
  up
  from
  71%
  last
  Friday,
  according
  to
  data
  from
  the
  CME
  FedWatch
  tool. 

Technical
Analysis:
Gold
price
holds
bullish
in
the
longer
term

The
gold
price
trades
on
a
stronger
note
on
the
day
following
the
break
above
the
descending
channel.
The
precious
metal
maintains
its
uptrend
above
the
key
100-day
Exponential
Moving
Average
(EMA)
on
the
daily
timeframe.
The
upward
momentum
is
also
supported
by
the
14-day
Relative
Strength
Index
(RSI),
which
stands
in
the
bullish
zone
around
55.0. 

The
crucial
resistance
level
for
yellow
metal
will
emerge
at
the
$2,400
psychological
level.
The
next
hurdle
is
seen
at
$2,432,
a
high
of
April
12.
Sustained
trading
above
this
level
could
set

XAU/USD
for
a
potential
retest
of
the
all-time
high
of
$2,450.

On
the
other
hand,
sustained
trading
below
$2,340,
the
former
resistance
level,
could
draw
in
enough
bearish
demand
to
head
$2,318,
a
low
of
July
1.
The
next
contention
level
to
watch
is
$2,274,
the
100-day
EMA.