• Gold Price portrays pre-Fed consolidation after two consecutive weekly gains.
• Softer United States data, no rate hike expectations from Federal Reserve favor XAU/USD bulls, via downbeat US Dollar.
• Hopes of upbeat China growth, mixed macroeconomic view prod Gold buyers.
• US CPI for May will be crucial for Fed watchers despite 70% bets on no rate hike in June.

Gold Price (XAU/USD) begins the key week with mild losses, grinding lower to around $1,961 after witnessing a two-week winning streak. In doing so, the Gold price positions for the US Federal Reserve (Fed monetary policy meeting after cheering the broad US Dollar weakness amid dovish concerns about the Federal Reserve’s next move, backed by downbeat United States data. However, the cautious mood ahead of this week’s United States inflation numbers and other key events challenge the XAU/USD bulks.

Gold Price benefits from dovish Federal Reserve concerns

Gold Price rose for the second consecutive week in the last as market players place heavy bets on the Federal Reserve’s (Fed) no rate hike decision, especially after the last weeks’ downbeat United States (US) data.

During the last week, downbeat prints of the US activity numbers for May joined disappointing employment clues to weigh on the US Dollar, despite looming economic fears. That said, the latest United States Initial Jobless Claims jumped to the highest levels since September 2021 whereas the US ISM Services PMI, S&P Global PMIs and Factory Orders also printed softer outcomes for May and pushed back the Fed hawks, which in turn weighed the US Dollar and propelled the Gold Price.

That said, US Dollar Index (DXY) dropped in the last two consecutive weeks to 103.56 at the latest, grinding near bottom.

With this, market players placed higher bets on the US Federal Reserve’s no rate change decision in its June 13-14 policy meeting. That said, the CMEGroup's Fedwatch tool suggests around 72% change of the Fed rate being unchanged to 5%-5.25% range.

However, Tuesday’s US Consumer Price Index (CPI) data appears crucial for May appears crucial to determine the Fed decision as the United States central bank has always shown readiness to tame the inglation with “whatevet it takes” attitude. “US May CPI data will be published just ahead of the FOMC decision and that is adding some uncertainty to the immediate call – a strong core print could force the FOMC’s hand. The median market estimate expects that core inflation rose 0.4% m/m with the headline rate rising 0.2% owing to weaker energy costs,” said Analysts at the ANZ.

Hence, the Gold price remains on the bull’s radar amid the Federal Reserve (Fed) concerns but cautious mood ahead of this week’s key US data, monetary policy meetings challenge the Gold buyers.

Movnig on, monetary policy meeting decision from the Fed, ECB, and BoJ, as well as key data from the US on inflation and retail sales, and employment numbers from Australia and the UK, will be in the spotlight to offer a volatile week to the Gold traders ahead.

Also read: Gold Price Weekly Forecast: XAU/USD faces two-way risks in Fed week

Gold Price Technical analysis

Gold Price fades recovery from a fortnight-old ascending support line, around $1,943 by the press time. Even so, the bullish signals from the Moving Average Convergence and Divergence (MACD) and firmer Relative Strength Index (RSI) line, placed at 14, push back bearish bias.

Hence the XAU/USD is likely to remain sidelined between the aforementioned support line and a one-month-old horizontal resistance area comprising the 200-SMA, respectively near $1,943 and $1,985.

Should the Gold Price break the $1,943 support, the previous monthly low of near $1,932 and the 61.8% Fibonacci Expansion (FE) of the XAU/USD’s moves from May 10 to June 02, near $1,910, will gain the market’s attention.

On the contrary, a clear upside break of $1,943 can quickly propel the Gold Price toward the $2,000 round figure.

Following that, the 61.8% Fibonacci retracement of the pair’s May-June downside, near $2,025, will be in the spotlight.

Overall, the Gold price aptly portrays the market’s indecision ahead of the top-tier data/events