Gold flat lines above $4,200 mark; looks to US PCE Price Index for some meaningful impetus

• Gold extends its sideways consolidative price move and remains confined in the weekly range.
• Dovish Fed expectations keep a lid on the USD recovery and lend support to the precious metal.
• Traders, however, opt to wait for the US PCE Price Index before placing fresh directional bets.

Gold (XAU/USD) struggles to capitalize on the overnight bounce from the $4,175 area, or the vicinity of the weekly trough, and oscillates in a narrow trading range during the Asian session on Friday. Traders now seem reluctant and opt to move to the sidelines ahead of the September Personal Consumption Expenditures (PCE) Price Index, or the Federal Reserve's (Fed) preferred inflation gauge. The crucial data will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide a fresh directional impetus to the non-yielding yellow metal.

In the meantime, the growing acceptance that the US central bank will lower borrowing costs again next week fails to assist the USD in building on the overnight bounce from its lowest level since late October. This, along with geopolitical uncertainties and the cautious market mood, supports the safe-haven Gold. Moreover, the recent range-bound price action witnessed over the past week or so makes it prudent to wait for a sustained move in either direction before confirming the near-term trajectory for the bullion, which remains on track to register modest weekly losses.

Daily Digest Market Movers: Gold struggles as traders seem reluctant ahead of the US inflation data

• Global outplacement firm Challenger, Gray & Christmas said that planned job cuts declined 53%, to 71,321 in November, from 153,074 in the previous month, which was the highest for an October month since 2003. Separately, the US Labour Department reported that Initial Jobless Claims fell to 191K in the week ended November 29, marking the lowest level in more than three years.
• Despite the upbeat labor market reports, traders are still pricing in an over 85% probability that the US Federal Reserve will cut interest rates by 25 basis points at its upcoming policy meeting next week. This, in turn, fails to assist the US Dollar to build on Thursday's modest recovery move and continues to act as a tailwind for the non-yielding Gold through the Asian session on Friday.
• Russian President Vladimir Putin said on Thursday that some proposals in a US plan to end the war in Ukraine are unacceptable, suggesting that any deal is still some ways off. Furthermore, Putin warned again that Ukrainian troops must withdraw from the Donbas region or Russia will seize it. This keeps geopolitical risks in play and turns out to be another factor supporting the commodity.
• Market participants are now eyeing the September US Personal Consumption Expenditures (PCE) Price Index. The headline print is expected to show that annual inflation in the US edged higher to 2.8% from 2.7% in August. Meanwhile, the core PCE Price Index – which is seen as the Fed's preferred inflation gauge – is seen holding steady at the 2.9% YoY rate during the reported month.
• Nevertheless, the crucial data will be scrutinized closely for more cues about the Fed's future rate-cut path. This will drive the USD demand and provide a fresh directional impetus to the commodity. In the meantime, the mixed fundamental backdrop, warrants caution before placing aggressive bets around the XAU/USD pair, which seems poised to post modest weekly losses.

Gold awaits a breakout through a one-week-old range before the next leg of a directional move

Any upside momentum might continue to face some resistance near the $4,245-4,250 region amid mixed technical oscillators on hourly/daily charts. The next relevant hurdle is pegged near the $4,277-4,278 area, above which the Gold price could aim to reclaim the $4,300 round figure. A sustained strength beyond the latter will be seen as a key trigger for the XAU/USD bulls and pave the way for additional near-term gains.

On the flip side, dips towards the weekly low, around the $4,164-4,163 region, might still be seen as a buying opportunity and remain limited. A convincing break below, however, might prompt technical selling and make the Gold price vulnerable to test the $4,100-4,090 confluence. The latter comprises the 200-period Exponential Moving Average (EMA) on the 4-hour chart and an ascending trend-line extending from late October, which in turn, should act as a strong base for the XAU/USD pair.