Gold remains capped below $2,500 on a firmer US dollar

• The price of gold is lower at the start of the Asian session on Wednesday.
• Rising geopolitical tensions in the Middle East and firmer expectations for a Fed rate cut could limit gold’s downside.
• JOLTS and Fed Beige Book Job Openings are scheduled for later on Wednesday.

The price of gold (XAU/USD) bounced back from multi-day lows on Wednesday, but remains below the $2,500 barrier amid a renewed bullish trend in the US dollar (USD). However, ongoing geopolitical risks and impending Federal Reserve (Fed) interest rate cuts could support the yellow metal in the short term.

Later on Wednesday, JOLTS Job Openings and the Fed Beige Book will be released. Investors will closely monitor Friday’s highly anticipated August US non-farm payrolls (NFP), which could determine the size and pace of a potential interest rate cut at the Federal Reserve’s September policy meeting. If the report shows a weaker-than-expected reading, that could fuel speculation about a US recession and faster Fed rate cuts. This, in turn, could further boost the precious metal as lower interest rates reduce the opportunity cost of holding gold without yield.

Daily Digest Market Movers: Gold price loses ground amid firmer US dollar

• “We see evidence that speculative gold positioning is effectively maxed out for now. I think the level at which gold is under pressure due to the rising dollar reflects our view on positioning,” said Daniel Ghali, commodities strategist at TD Securities. .
• The US ISM manufacturing PMI rose to 47.2 in August from an eight-month low of 46.8 in July. This figure was below the market consensus of 47.5.
• Traders raised the chance of a more aggressive half-point cut to 39 percent, up from 31 percent ahead of the US ISM Manufacturing PMI report, according to CME Group’s FedWatch measure.
• The number of US JOLTS job openings is expected to be 8.10 million, down from 8.184 million in June.
• The US ISM services PMI is expected to fall to 51.4 in August from 51.1 in July.

Technical Analysis: Gold Price Keeps Bright Long-Term Picture

The price of gold is trading in negative territory on the day. The precious metal maintains a bullish trend on the daily chart as the price is above the 100-day exponential moving average (EMA) and is supported by the 14-day relative strength index (RSI), which is above the median line.

The key upside barrier for the yellow metal appears at $2,530-2,540, representing the upper limit of the five-month-old ascending channel and all-time high. Sustained trading above this level could pave the way to the psychological $2,600 threshold.

On the other hand, the immediate support level to watch is $2,470, the August 22 low. A breach of said level could see a downward move back towards $2,432, the August 15 low. Extended losses will see a dip at $2,377, the 100-day EMA.