Gold’s price rose for the second consecutive day, reaching $1,920 per troy ounce in the Asian session. The US Dollar’s fall, possibly due to a decline in US Treasury yields, is supporting the price of gold, as the yield on ten-year US Treasury bonds fell 1.36% in two days.

Despite encouraging statistics on the US economy, the US Dollar Index (DXY) is currently trading about 104.90 below its best level since April.

US initial unemployment claims decreased from 229K to 216K as of September 1, with a predicted increase to 234K. Unit labor costs increased to 2.2% in the second quarter from 1.6%, despite expected stability.

With market participants expecting a 25 basis point interest rate increase during the November and December meetings and possibly maintaining higher rates for an extended period, the recent strength of the US Dollar is attributed to investors’ confidence in a hawkish Fed approach, which may have limited the upward trend of gold prices.

Investor confidence remains low due to concerns about China’s economic decline and ongoing trade disputes with the US, which could potentially decrease demand for precious metals.

With more actions anticipated soon, China has already begun implementing policy measures to boost its flagging economy in an effort to combat a sharp decline following the outbreak.

The G20 leaders’ conference in New Delhi starts this Saturday, with Chinese President Xi Jinping and US President Joe Biden absent, affecting the fragile relationship between the two nations. If there are no significant economic releases, statements made by Fed members may have an impact on traders.

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