Gold prices are experiencing a lack of clear intraday direction, caught between conflicting factors. The USD is strengthened by reduced expectations of an imminent Fed rate cut, acting as a hindrance for the commodity. On the other hand, geopolitical risks and global economic uncertainty provide support to the precious metal.

The Gold price, represented by XAU/USD, struggles to build on the rebound observed from the $2,010-$2,009 range, the weekly low. During the early European session on Friday, the commodity moves within a narrow trading range as traders adopt a cautious stance ahead of the release of the US Personal Consumption Expenditures (PCE) Price Index. This economic indicator is expected to offer insights into the potential timing of the Federal Reserve’s interest rate cuts, thus influencing the dynamics of the US Dollar (USD) and impacting gold’s direction.

The USD Index, tracking the Greenback against a basket of currencies, remains elevated near its highest level since December 13, reflecting reduced expectations of a more aggressive Fed policy easing in 2024. This poses a challenge for the Gold price. However, ongoing concerns about geopolitical tensions in the Middle East and a decline in US Treasury bond yields offer some support to the safe-haven nature of gold. Despite these dynamics, XAU/USD is on course for a second consecutive week of losses, with attention now turning to the upcoming FOMC meeting on January 30-31.