Gold remains below all-time peak, traders seem non committed amid pre-Fed lull

• Gold price struggles to attract any meaningful buyers, though the downside seems limited. 
• Bets for a 50 bps Fed rate cut keep a lid on the attempted USD recovery and lend support.
• Traders also seem reluctant to place aggressive bets ahead of the pivotal FOMC decision. 

Gold price (XAU/USD) struggles to capitalize on a modest Asian session uptick and hits a fresh daily low, around the $2,568-2,567 region in the last hour, though any meaningful corrective slide still seems elusive. The markets are currently pricing in a greater chance of an oversized interest rate cut by the Federal Reserve (Fed) on Wednesday, which keeps the US Dollar (USD) bulls on the defensive and should act as a tailwind for the non-yielding yellow metal. 

Moreover, persistent geopolitical risks stemming from the ongoing conflicts in the Middle East and the US political uncertainty ahead of the November election might continue to offer some support to the Gold price. Traders might also prefer to wait for the outcome of the highly-anticipated two-day Federal Open Market Committee (FOMC) meeting and the updated economic projections before positioning for the next leg of a directional move for the XAU/USD. 

Daily Digest Market Movers: Gold price bulls turn cautious and await Fed decision before placing fresh bets

• Bets for a more aggressive policy easing by the Federal Reserve will assist the gold price in attracting some dip-buyers on Wednesday and stall the overnight modest pullback from the vicinity of the all-time peak. 
• According to CME Group’s FedWatch Tool, the markets are currently pricing in a 65% chance that the US central bank will lower borrowing costs by 50-basis points at the end of a two-day meeting later today.
• The yield on the benchmark 10-year US government bond bounced from a 16-month low following the release of US Retail Sales data on Tuesday, albeit lacks follow-through and caps the US Dollar recovery. 
• The US Census Bureau reported that Retail Sales in the US rose 0.1% in August as compared to a decline of 0.2% expected, while sales excluding Autos missed consensus estimates and expanded by 0.1%. 
• The upbeat data prompted some intraday USD short-covering move and pushed it away from the lowest level since July 2023, though the positive move runs out of steam amid dovish Fed expectations. 
• At least nine people were killed in simultaneous explosions of handheld pagers used by Hezbollah members in Lebanon, raising the risk of a broader Middle East war and underpinning the safe-haven metal. 
• Meanwhile, North Korea, days after offering a view into a facility built to enrich uranium for nuclear bombs, test-fired multiple ballistic missiles toward the South Korean and Japanese eastern seas on Wednesday. 
• The market focus remains glued to the critical FOMC policy decision, which, along with updated economic projections, including the so-called ‘dot plot’, should provide a fresh impetus to the XAU/USD. 

Technical Outlook: Gold price dip-buying should limit any corrective slide to $2,530-2,525 resistance breakpoint

From a technical perspective, bulls might now wait for a move beyond the $2,589-2,590 region, or the all-time peak touched on Monday, before placing fresh bets. The subsequent move up has the potential to lift the Gold price above the $2,600 mark, towards testing the top boundary of a short-term ascending channel extending from sub-$2,400 levels touched late June. The said barrier is currently pegged near the $2,609-2,610 area, which if cleared decisively will confirm a fresh breakout and set the stage for an extension of the recent well-established uptrend. 

On the flip side, some follow-through selling below the overnight swing low, around the $2,561-2,560 area, could pave the way for deeper losses towards the $2,530-2,525 strong horizontal resistance breakpoint. Any further decline is more likely to attract fresh buyers and remain limited near the $2,500 psychological mark. The latter should act as a key pivotal point, which if broken decisively could drag the Gold price to the $2,475-2,470 confluence – comprising the 50-day Simple Moving Average and the lower boundary of the aforementioned trend channel.