• Gold price is seen consolidating its recent downfall to over a three-month low.
• a hawkish outlook by major central banks acts as a headwind for the commodity.
• The US Dollar preserves the overnight recovery gains and contributes to cap.

Gold price enters a bearish consolidation phase during the Asian session on Friday and oscillates in a narrow trading band near the $1,915-$1,916 area, just above its lowest level since March 16 touched the previous day.

Hawkish major central banks act as a headwind for Gold price

A slew of interest rate hikes and a more hawkish outlook by major central banks turn out to be a key factor that continues to act as a headwind for the non-yielding Gold price. In fact, the Bank of England (BoE), the Swiss National Bank (SNB) and Norges Bank all hiked their benchmark interest rates on Thursday. This comes on the back of a surprise 25 basis points (bps) rate hike by the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) earlier this month. Moreover, the European Central Bank (ECB) last week lifted rates to the highest level in 22 years and projected further tightening to bring down inflation.

Modest US Dollar strength contributes to capping XAU/USD

Furthermore, Federal Reserve (Fed) Chair Jerome Powell, during his two-day congressional testimony, reiterated that the central bank will likely raise interest rates again this year, albeit at a "careful pace", to combat stubbornly high inflation. Powell added that the Fed doesn't see rate cuts happening any time soon and is going to wait until it is confident that inflation is moving down to the 2% target. This, in turn, led to the overnight sharp rise in the US Treasury bond yields, which is seen offering some support to the US Dollar (USD) and might further contribute to keeping a lid on the US Dollar-denominated Gold price.

Economic woes could lend support to the safe-haven metal

Investors, meanwhile, now seem worried about economic headwinds stemming from rapidly rising borrowing costs. This is evident from the prevalent cautious mood around the equity markets and helps limit the downside for the safe-haven precious metal, at least for the time being. The upside potential, however, seems limited, warranting some caution for aggressive traders and before positioning for any meaningful recovery. Nevertheless, the Gold price remains on track to register heavy weekly losses and seems poised to extend its recent pullback from the all-time high, around the $2,080 region touched in May.

Traders now look to flash PMI prints for some impetus

Market participants now look forward to the release of the flash Purchasing Managers' Index (PMI) from the Eurozone, the United Kingdom (UK) and the United States (USD). The data will provide fresh cues about the global economic condition and drive demand for traditional safe-haven assets, including the XAU/USD. Apart from this, the US bond yields will influence the USD price dynamics and contribute to producing short-term trading opportunities around Gold price on the last day of the week.