Gold (XAU/USD) extended its intraday losses during the Asian session on Wednesday, retreating from a near two-week high reached on Tuesday. The decline halts a four-day winning streak as improved risk appetite in equity markets weighs on the safe-haven asset, despite a lack of fresh bearish triggers.
Recent weak US economic data continues to support the outlook for rate cuts by the Federal Reserve. Friday’s softer Nonfarm Payrolls report and Tuesday’s disappointing ISM Services PMI have heightened concerns over the US economy. The PMI slipped to 50.1 in July, with declines in both employment and new orders, fueling speculation of a Fed rate cut in September and potentially two more cuts by year-end.
Despite this dovish sentiment, the US Dollar remains subdued, which should generally support gold. However, the current positive risk tone is limiting upside momentum for the metal.
In global markets, Asian equities rose on Wednesday, tracking Tuesday’s Wall Street losses triggered by weak macro data. Trade tensions also linger, as President Trump confirmed new tariffs on semiconductor and pharmaceutical imports are due within days, adding to existing levies on autos, steel, and aluminum.
With no major US data releases scheduled for Wednesday, traders will focus on upcoming comments from Federal Reserve officials and next week’s inflation data, which could provide clearer direction for both the US Dollar and gold prices.
