• Gold price drifts lower for the second straight day amid the Fed’s hawkish outlook.
• A September rate cut by the Fed remains on the table, which caps gains for the USD.
• Persistent geopolitical tensions contribute to limiting the downside for the XAU/USD.

Gold price (XAU/USD) remains under some selling pressure for the second successive day and drops to over a one-week low during the Asian session on Wednesday. Comments from Federal Reserve (Fed) Governors Michelle Bowman and Lisa Cook on Tuesday suggested that the central bank is unlikely to kickstart its rate-cutting cycle anytime soon amid a resilient US economy. The hawkish outlook triggers a modest uptick in the US Treasury bond yields, which acts as a tailwind for the US Dollar (USD) and undermines the non-yielding yellow metal.

Investors, meanwhile, are still pricing in a greater chance of a September Fed rate cut move in the wake of weaker inflation data for May. This, along with the risk of a further escalation of geopolitical tensions in the Middle East and the protracted Russia-Ukraine war, lends some support to the safe-haven Gold price. Traders might also prefer to wait for Thursday's release of the final US Q1 GDP print and the Personal Consumption Expenditures (PCE) Price Index on Friday before positioning for the next leg of a directional move for the XAU/USD.