Gold met with fresh supply, accompanied by some follow through USD buying.

During the Asian session on Tuesday, the gold price (XAUUSD) draws new sellers and reverses the previous day’s strong rise, bringing it closer to the crucial 50-day Simple Moving Average (SMA) resistance. As investors await further information about the Federal Reserve’s (Fed) rate-cutting plan, the US Dollar (USD) gains traction and becomes a key factor imposing downward pressure on the commodity. Furthermore, a generally bullish tone in the equities markets leads to a shift away from the safe-haven precious metal.

Meanwhile, markets have increased their expectation that the Fed would drop borrowing costs in September and again in December. Fed bets boosted by the US ISM PMI. Which indicated that the manufacturing sector contracted for the third consecutive month in June and factory input costs fell to a six-month low. This, combined with falling US Treasury bond yields, could constrain USD gains. Aside from that, China’s economic troubles. Geopolitical threats, and political uncertainty may provide support for the gold price.

Fed Chair Powell’s speech aimed to provide some energy ahead of the FOMC minutes on Wednesday.

Traders could want to shift to the sidelines ahead of Fed Chair Jerome Powell’s address later this Tuesday. And the FOMC meeting minutes. Which will be released on Wednesday. Furthermore, the carefully awaited US monthly employment data, known as the Nonfarm Payrolls (NFP) report, released on Friday, may impact expectations regarding the Fed’s future policy decisions. This, in turn, will play an important part in moving sentiment toward the greenback and defining the next leg of a directional move for the gold price.

Daily Market Movers: Gold price remains down despite continuous USD buying ahead of Powell’s speech.

Softer US macro data reported on Monday bolstered predictions that the Federal Reserve will lower interest rates in September and again in December, sparking some intraday short-covering in the gold market.
The Institute For The ISM Manufacturing PMI stayed in contraction territory for the second consecutive month in June, falling from 48.7 to 48.5, missing consensus predictions.
According to the data, the Employment Index fell to 49.3 from 51.1 in May, while the Prices Paid Index, which measures inflation, fell from 57 to 52.1 during the same month.
This comes on top of the US PCE Price Index, which showed that inflation in May dropped to its lowest annual rate in more than three years, raising expectations of an impending start to the Fed’s rate-cutting cycle.
The US Treasuries dropped off. With increased odds of Donald Trump being elected. As US President again later this year, resulting in Some US Dollar short-covering has limited the upside for the XAUUSD.
Investors now expect Fed Chair Jerome Powell’s speech later this Tuesday to provide some meaningful impetus ahead of the FOMC minutes on Wednesday and the US Nonfarm Payrolls report on Friday.
Meanwhile, Tuesday’s US economic docket involves the release of JOLTS Job Openings data, which may influence USD price dynamics and contribute to providing short-term trading opportunities.