Gold price moves away from multi-week high on hawkish Fed expectations

• Gold price turned lower for the second straight day on Monday, though the downside seems limited.
• The Fed’s hawkish signal remains supportive of elevated US bond yields and exerts some pressure. 
• Geopolitical risks and trade war fears might continue to offer support to the safe-haven XAU/USD.

Gold price (XAU/USD) struggles to capitalize on its modest Asian session uptick on Monday and currently trades around the $2,635 area, down for the second straight day. The US Dollar (USD) remains close to a two-year high touched last Thursday on the back of the Federal Reserve’s (Fed) hawkish signal that there would be fewer rate cuts in 2025. Moreover, the optimism over US President-elect Donald Trump’s expansionary policies continues to underpin the Greenback, which, in turn, is seen acting as a headwind for the non-yielding yellow metal.

That said, persistent geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East, along with concerns about Trump’s tariff plans, should limit losses for the safe-haven Gold price. This, in turn, makes it prudent to wait for a strong follow-through selling before positioning for an extension of Friday’s retracement slide from the $2,665 area, or a nearly three-week top. Traders now look forward to the release of the final US Services PMI and Factory Orders data for some impetus later during the North American session.