A global sell-off in the equity markets – triggered by fears of the US tipping into recession – seems to have eased amid some bargain buying and exert some pressure on the safe-haven Gold price on Wednesday.
The US Treasury bond yields build on the overnight advance, which was their biggest rise since early June – and lend support to the US Dollar, which is further seen undermining the non-yielding yellow metal.
Government data released on Tuesday showed that the US trade deficit fell by 2.5%, to $73.1 billion in June from $75.0 billion in May owing to a 1.5% rise in exports of aircraft and US-produced oil and gas.
The markets are pricing in a 100% chance that the Federal Reserve will start lowering borrowing costs at the upcoming policy meeting in September and a near 70% probability of a 50-basis-point rate cut.
This, in turn, should keep a lid on the US bond yields and the USD, which, along with geopolitical risks stemming from the ongoing conflicts in the Middle East, might act as a tailwind for the XAU/USD.
Lebanese group Hezbollah launched a series of drone and rocket attacks against Israel on Tuesday in retaliation to Israel’s reported killings of a top Hezbollah commander and Hamas leader last week.
The market might now move into a typical pattern of consolidation in the absence of any relevant macro data from the US and await the next major fundamental catalyst before placing fresh directional bets

Daily Digest Market Movers: Gold price is undermined by positive risk tone and rebounding US bond yields-led USD uptick