• Gold price edges lower and erodes a part of Friday’s gains to over a two-week high.
• Hawkish Fed expectations revive the USD demand and exert pressure on the metal.
• Geopolitical risks could lend support to the XAU/USD and help limit further losses.

Gold price (XAU/USD) settled in the green for the first time in the previous three weeks in the wake of persistent geopolitical tensions and the recent US Dollar (USD) corrective decline. The precious metal, however, struggles to capitalize on its move beyond the 50-day Simple Moving Average (SMA) and edges lower during the Asian session on Monday amid bets that the Federal Reserve (Fed) will keep rates higher for longer.

In fact, market participants pushed back their expectations for an early interest rate cut by the US central bank following the release of higher-than-expected US consumer and producer prices earlier this month. Adding to this, the minutes of the late January FOMC meeting, along with hawkish remarks by Fed officials suggested that the central bank was in no hurry to cut interest rates amid sticky inflation and a resilient US economy.

The hawkish outlook remains supportive of elevated US Treasury bond yields, which assists the USD in holding above a three-week low touched last Thursday and exerts some downward pressure on the non-yielding Gold price. The downside, however, seems limited in the wake of the risk of a further escalation of military action in the Middle East and the prolonged Russia-Ukraine war, which tends to benefit the safe-haven XAU/USD