• Gold price oscillates in a range near the weekly low amid some follow-through USD buying.
• Expectations that the Fed will continue to tighten its policy act as a tailwind for the buck.
• The easing of COVID-19 curbs in China also contributes to capping the safe-haven XAU/USD.

Gold price struggles to gain any meaningful traction on Wednesday and oscillates in a narrow trading band through the early European session. The XAU/USD is currently placed just below the $1,775 level and remains well within the striking distance of the weekly low touched on Monday.

The US Dollar prolongs this week's recovery move from over a five-month low for the third straight day, which, in turn, is seen weighing on the Dollar-denominated Gold price. The recent strong US macro data points to the resilient economy and fuels speculations that the might lift rates more than projected. This continues to act as a tailwind for the US Treasury bond yields and pushes the greenback to a one-week high on Wednesday.

Apart from this, the latest optimism led by the easing of COVID-19 restrictions in China turns out to be another factor undermining the safe-haven XAU/USD. That said, expectations that the Fed will slow the pace of its rate-hiking cycle should help limit deeper losses for the non-yielding Gold price. In fact, the markets have been pricing in a relatively smaller 50 bps lift-off at the upcoming FOMC meeting on December 13-14.

Heading into the key central bank event risk, investors will also confront the release of the latest US consumer inflation figures next week. The data will influence the Fed's policy outlook, which should play a key role in driving the near-term USD demand and provide a fresh directional impetus to Gold price. In the meantime, the XAU/USD is likely to extend its sideways consolidative price move in the absence of any relevant economic data.

Technical levels to watch