Gold price holds comfortably above $2,600 mark; lacks bullish conviction

• Gold price oscillates in a range at the start of a new week amid mixed fundamental cues.
• Geopolitical risks continue to underpin the XAU/USD amid subdued US Dollar price action.
• The Fed’s hawkish stance backs elevated US bond yields and caps the pair’s gains.

Gold price (XAU/USD) struggles to capitalize on last week’s modest recovery from a one-month trough and oscillates in a range around the $2,625 region during the Asian session on Monday. The US Dollar (USD) bulls remain on the defensive below a two-year high touched on Friday and turn out to be a key factor acting as a tailwind for the commodity. Apart from this, geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East further lend support to the safe-haven precious metal. 

Meanwhile, the Federal Reserve’s (Fed) hawkish signal, that it would slow the pace of rate cuts in 2025, remains supportive of elevated US Treasury bond yields. This, along with a generally positive tone around the equity markets, seems to cap gains for the non-yielding yellow metal. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further appreciating move. Traders now look forward to the release of the Conference Board’s Consumer Confidence Index for short-term impetus.