In Tuesday's early New York session, gold showcased its resilience against the US Dollar, buoyed by hopes of an eventual dovish turn in Federal Reserve policy. Investors, eyeing a potential rollback of the Fed's restrictive interest rate stance, flocked towards non-yielding assets like gold, seeking refuge from the uncertainties looming in the market.

However, the precious metal's ascent is not without its challenges. Despite the optimism surrounding a possible shift in Fed rhetoric, policymakers are leaning towards maintaining interest rates higher for a prolonged period to counter persistent inflationary pressures. This stance, aimed at exerting downward pressure on inflation, casts a shadow over the bullish sentiment surrounding gold.

On the technical side, gold faces the threat of a fake breakout of the current descending channel as the price consolidates right below the upper boundary of the corridor. However, US inflation concerns are unlikely to unwind soon, and the prospects of a dovish Fed policy remain contingent upon a benign inflation path, which appears to be under question after recent inflation prints. Without a convincing Fed dovish pivot, the room for the Gold’s advance will likely be limited, and the downward path within the bearish corridor should persist:

Looking ahead, market focus shifts towards the United States’ core Personal Consumption Expenditure – Price Index data, scheduled for release on Thursday. Fed policymakers closely scrutinize underlying inflation metrics, shaping their stance on interest rates accordingly. The degree of change in core PCE inflation figures is poised to influence market expectations for potential rate cuts.

Investor expectations hint at a monthly increase of 0.4% in the core PCE price index, surpassing December's 0.2% uptick. However, annual inflation data is projected to moderate to 2.8% from the previous 2.9%. These figures are pivotal in gauging the trajectory of Fed policy and subsequent market reactions.

Echoing sentiments from the Fed, Kansas City Federal Reserve Bank President Jeffrey Schmid emphasized the challenges posed by a tight labor market and robust household demand. With inflation surpassing the 2% target, Schmid advocated for a cautious approach to monetary policy adjustments, further complicating the outlook for gold.

Meanwhile, the Pound Sterling struggles to initiate a powerful bullish run as investors await fresh economic cues to gauge the timing of potential rate cuts by the Bank of England. Additionally, speculators pare back bullish positions in the Pound Sterling, signaling a search for new catalysts to invigorate the currency's momentum.

The technical picture of GBPUSD indicates a high likelihood of a potential breach of the upper line of the bearish channel; however, the move will likely meet stiff resistance just above the line since the medium-term downside slope that lies near 1.27 will likely act as another strong resistance area that will push the price lower: