Gold price consolidates as traders await Fed Chair Powell’s announcement.

The gold price (XAUUSD) oscillates in a narrow trading band during the early European session on Wednesday. Consolidating its recent significant gains and drawing closer to the all-time high.

Bets on a June Fed rate cut weaken the USD and support the metal.

Traders currently appear hesitant and prefer to wait for more clues about the Federal Reserve’s (Fed) rate cutting course. Before making new directional bets. As a result, the attention remains on Fed Chair Jerome Powell’s congressional testimony. Which will play a crucial role in affecting the near term. The US Dollar (USD) price dynamics will provide a new directional impulse to the non-yielding yellow metal.

On Wednesday, traders will also face the release of the US ADP report on private-sector employment and the JOLTS Job Openings data, which are scheduled for later in the early North American session. Meanwhile, rising consensus that the Federal Reserve (Fed) will begin cutting interest rates in June, along with Tuesday’s poor US macro data, keeps USD bulls on the defensive and serves as a tailwind for the gold market. Aside from that, global tensions and fears about China’s economy could help to limit the downside for the safe-haven XAUUSD.

Daily Market movers: Fed rate cut bets continue to support the gold price, and softer Risk tone.

Weaker US economic statistics reported on Tuesday reiterated market expectations. That the Federal Reserve will lower interest rates sooner rather than later, bringing the gold price back closer to its all time high.
According to the Institute for Supply Management (ISM). Economic activity in the services sector increased in February for the 14th consecutive month, albeit at a slower pace due to a reduction in employment.
Separately, the US Commerce Department’s Census Bureau reported that total factory orders decreased by 3.6% MoM (-2.0% YoY) in January, following a 0.3% decline the previous month.

Geopolitical uncertainties and China’s economic troubles also help the safe-haven Gold.

Aside from this, continued geopolitical tensions and China’s economic troubles reduced investors’ appetite for risky assets, sending flows towards the perceived safe-haven gold. Bulls, however, choose to lighten their positions ahead of Fed Chair Jerome Powell’s congressional appearance, which will provide clarity on the interest rate path and provide a new push to the XAUUSD pair.
According to the CME Group’s FedWatch tool, markets are pricing in a 70% possibility that the Fed will begin decreasing interest rates by June, keeping US Dollar bulls on the defensive and limiting the commodity’s downside.
Traders will take additional indications on Wednesday from the release of the US ADP report on private-sector employment and JOLTS Job Openings data, which comes ahead of the much watched Nonfarm Payrolls report on Friday.