Gold price is restored but still difficult

Gold price (XAU/USD) stages a modest recovery from over a one-week low touched earlier this Monday, though remains in the red through the first half of the European session. The US Dollar (USD) continues with its struggle to gain any meaningful traction amid the uncertainty over the Federal Reserve's (Fed) rate-cut path. This, along with a softer risk tone and geopolitical risks, turn out to be key factors lending some support to the safe-haven precious metal.

The upside, however, remains capped in the wake of growing acceptance that the Fed will stick to its higher-for-longer interest rates narrative to bring down inflation. The hawkish outlook remains supportive of elevated US Treasury bond yields and might act as a headwind for the non-yielding yellow metal. Traders might also refrain from placing aggressive directional bets ahead of the highly-anticipated FOMC decision, scheduled to be announced on Wednesday.

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