Gold struggled to capitalize on its small advances over the last two days.

On Tuesday, the gold price (XAUUSD) held firm below $2,300 and gained somewhat for the second day in a row. The upswing, however, lacks positive confidence as traders eagerly await the release of the latest consumer inflation numbers from the United States (US). And the outcome of the highly anticipated Federal Open Market Committee (FOMC) meeting on Wednesday. This should provide additional hints regarding The expected timeframe of when the Federal Reserve (Fed) will begin decreasing interest rates. Which will have a significant impact on the next leg of a directional move for the non-yielding yellow metal. As we approach the main data/event concerns. Rising acceptance that the Fed will hold rates higher for longer due to a solid US labor market and sticky inflation continues to weigh on the gold price.

The USD is supported by falling probabilities of a Fed rate cut in September, which acts as a headwind.

Meanwhile, the hawkish stance helps the US Dollar (USD) maintain its one month high. Which is considered as another factor contributing to the XAUUSD’s upside cap. The downside, however, appears cushioned in the aftermath of political uncertainty in Europe. And prolonged geopolitical concerns, warranting prudence before positioning. for a continuation of the recent decline from the all-time high.

Daily Market Movers: Gold price bulls stay on the sidelines amid hawkish Fed predictions.

Reduced predictions on the Federal Reserve’s forthcoming interest rate cut in September. Combined with China’s decision to suspend buying. Prove to be major reasons limiting the upward for the gold price.
The current market pricing indicates. That the Fed may decrease interest rates by only 25 basis points this year. Either at the November or December policy meeting, which continues to support the US dollar.
The USD Index (DXY), which tracks the US dollar against a basket of currencies, is nearing its highest level since May 9, helping to keep the dollar-denominated commodity under control. .
Traders, on the other hand, appear hesitant and prefer to wait for more clues about when the Fed will begin decreasing interest rates before placing new directional bets on the XAUUSD pair.
As a result, the focus will remain on Wednesday’s release of the latest US consumer inflation data and the critical FOMC monetary policy decision, which will be revealed later in the US session.
Stronger job and salary statistics posted on Friday heightened concerns that inflation could remain sticky in an otherwise healthy US economy, reaffirming the higher for longer interest rate narrative.

Investors are now looking to the US CPI and FOMC policy decisions for a new directional impulse.

The headline US Consumer Price Index is predicted to ease to 0.1% in May from 0.3% the previous month. While the yearly rate is seen stable at 3.4%, continuing strong over the Federal Reserve’s yearly target of 2%.
Furthermore, Core CPI is expected to remain stable at 0.3% in the reported month. And fall to 3.5% YoY from 3.6% in April, confirming persistently high inflationary pressure.
Meanwhile, the US Federal Reserve is expected to maintain interest rates. And issue revised economic estimates, including the so-called “dot plot,”. Which will have an impact on gold.