Gold price ticks lower on positive risk tone; bears lack conviction amid trade war fears

• Gold price consolidates in a narrow band on Wednesday amid mixed fundamental cues.
• A positive risk tone caps the XAU/USD, though sliding US bond yields lend some support.
• Traders also seem reluctant to place directional bets ahead of the FOMC policy decision. 

Gold price (XAU/USD) struggles to capitalize on the previous day’s positive move and trades with a mild negative bias, just above the $2,760 level during the Asian session on Wednesday. A generally positive tone around the equity markets is seen as a key factor acting as a headwind for the safe-haven precious metal. The downside, however, seems limited amid a fresh leg down in the US Treasury bond yields, which cap the US Dollar (USD) recovery from over a one-month low and lends support to the non-yielding yellow metal. 

Apart from this, concerns about US President Donald Trump’s tariff plans might contribute to limiting losses for the Gold price amid subdued US Dollar (USD) price action. Traders might also refrain from placing aggressive bets and opt to wait on the sidelines ahead of the key central bank event risk – the outcome of a two-day FOMC monetary policy meeting. The Fed’s rate outlook will play a key role in influencing the near-term USD price dynamics and determining the next leg of a directional move for the precious metal.