Gold consolidate in a range and  impacted by a variety of diverging forces.

The gold price (XAUUSD) struggles to benefit on the previous day’s strong rebound from the 50-day Simple Moving Average (SMA) support at $2,365-2,364, or a one-week low, and oscillates in a range during the Asian session on Tuesday. The risk-on impulse, as evidenced by the bargain-buying relief bounce in the equity markets, works as a drag on the safe-haven precious metal. Furthermore, recovering US Treasury Bond yields support the US Dollar (USD) while also limiting the commodity’s upside potential.

Bets on a 50-bps Fed rate drop in September and escalating geopolitical tensions provide support.

The incoming softer US macro data exacerbated concerns about a slowdown in the world’s largest economy and heightened anticipation for further interest rate cuts by the Federal Reserve. This should limit the upside for US bond yields and the USD, which should continue to support the gold price. Aside from that, geopolitical risks arising from ongoing conflicts in the Middle East indicate that the path of least resistance for the XAUUSD is to the upside, supporting the possibility of some dip-buying.

Daily Market Movers: Gold price bulls stay on the sidelines amid Mixed fundamental cues.

The US macro statistics released this week showed that business activity in the manufacturing sector dropped more steeply than predicted in July, and employment growth slowed more than projected last month.
This raises concerns about a probable US recession and the prospect of further aggressive policy easing by the Federal Reserve, which has resulted in the recent rapid drop in US Treasury bond yields.
In fact, the yield on the benchmark 10-year US government bond fell to its lowest level since mid-2023, with traders now pricing in a nearly 100% possibility of a 50 basis point Fed rate decrease in September.
This, to a greater extent, overshadowed Tuesday’s positive publication of the US Services PMI, which improved to In July, the reading rose to 51.4 from 48.8 the previous month, exceeding consensus predictions of 51.
San Francisco Fed President Mary Daly said Monday. That a weakening job market isn’t cause for concern. And that interest rates will be cut to maintain the balance of full employment and price stability.
Meanwhile, Iran, Hamas, and the Lebanese group Hezbollah have committed to strike against Israel for the death of Hamas political chief Ismail Haniyeh in Tehran last week, reinforcing the safe-haven metal.
However, the risk-on sentiment, combined with rising US Treasury bond yields and a minor US Dollar increase, fails to help the commodity attract major buyers during the Asian session on Tuesday.