Gold prices continue to drift sideways in a consolidation pattern.

The gold price (XAUUSD) continues to struggle to find real movement. Remaining in a familiar range around the 50-day Simple Moving Average (SMA) into the Asian session on Wednesday. Growing market confidence that the

Hawkish Fed expectations support the USD and act as a drag on the metal.

Federal Reserve (Fed) would wait until the June policy meeting to decrease interest rates. Boosts US Dollar (USD) demand and continues to operate as a headwind for the non yielding yellow metal. Aside from that, the current risk on advance in global financial markets appears to weaken the safe-haven commodity.

However, the impending US government shutdown. Combined with a further drop in US Treasury bond yields, may deter USD bulls. From taking aggressive bets and offer some support to the safe-haven gold price.

The damage appears to be limited ahead of Thursday’s important US PCE Price Index.

Investors may also want to remain on the sidelines and await Thursday’s. US Personal Consumption Expenditures (PCE) Price Index for clues about the Fed’s rate-cutting strategy. This may also help to limit the downside for the XAUUSD. But caution should be exercised before concluding that the recent recovery from a multi month low has ended.

Daily Movers: Gold price seeks new catalyst before the next Leg of a Directional Move.

A mix of diverging forces fails to provide any major impetus to the gold price. Which continues to consolidate in a nearly one week old trading range.
On Wednesday. The Federal Reserve’s story of higher for longer interest rates supported the US Dollar while continuing to undercut the non yielding yellow metal.
A further decline in US bond yields, combined with the impending US government shutdown. And Tuesday’s poor release of US Durable Goods Orders, could cap the USD.
US President Joe Biden highlighted the need of finding a solution to avoid a damaging government shutdown on March 1. As a congressional stalemate showed no signs of abating.
The US Census Bureau reported that orders for long-lasting US-made
Goods fell more than predicted in January, by 6.1%, the highest in nearly four years.

Conference Board’s Consumer Sentiment Index dipped.

Meanwhile, the Conference Board’s Consumer Sentiment Index dipped following three months of consecutive improvements, coming in at 106.7 in February, despite lower inflation predictions.
The Richmond Fed’s Manufacturing Index had a negative reading for the fourth consecutive month, although improved to -5 in February from -15 the previous month.
Traders are now anticipating the release of the preliminary US GDP print, which is expected to reflect the previous projections and indicate that the economy grew at a 3.3% annualized rate in Q4.
This, combined with remarks by influential FOMC members, will play a crucial role in increasing USD demand and creating some meaningful trade opportunities Around the XAUUSD.
The spotlight, however, remains on the US Personal Consumption Expenditures Price Index on Thursday, which might provide new clues regarding the Fed’s rate-cutting strategy.