• Gold price struggles to capitalize on its modest gains registered over the past two days.
• Diminishing odds for a September Fed rate cut underpin the USD and act as a headwind.
• Investors now look to the US CPI and FOMC policy decision for a fresh directional impetus.

Gold price (XAU/USD) showed some resilience below the $2,300 mark and posted modest gains for the second straight day on Tuesday. The uptick, however, lacks bullish conviction as traders keenly await the release of the latest consumer inflation figures from the United States (US) and the outcome of the highly-anticipated Federal Open Market Committee (FOMC) meeting later this Wednesday. This should provide fresh cues about the likely timing when the Federal Reserve (Fed) will start cutting interest rates, which, in turn, will play a key role in influencing the next leg of a directional move for the non-yielding yellow metal.

Heading into the key data/event risks, growing acceptance that the Fed will keep rates higher for longer amid a strong US labor market and sticky inflation continues to act as a headwind for the Gold price. The hawkish outlook, meanwhile, assists the US Dollar (USD) to stand tall near a one-month peak, which, in turn, is seen as another factor that contributes to capping the upside for the XAU/USD. The downside, however, seems cushioned in the wake of political uncertainty in Europe and persistent geopolitical tensions, warranting caution before positioning for an extension of the recent pullback from the all-time peak.