Gold price trades with negative bias for the third consecutive day, moving further from a peak reached last week. XAU/USD also declines to a low surpassing one week, but lacks momentum and is now near the $1,925 mark, down less than 0.10% for the day.

The assumption that the Fed will maintain interest rates higher and pause its rate-hiking cycle at its September meeting has caused the US dollar to rise to its highest level since March 10. Governor of the Fed, Christopher Waller, reiterated that there is no reason to raise the cost of short-term borrowing. Recent US macroeconomic data, however, show a robust economy, enabling the Fed to maintain policy restraints.

By the end of the year, the markets anticipate a 25 basis point liftoff thanks to high US Treasury bond yields. As a result, the Greenback is supported, and sentiment towards the non-yielding Gold price is softer. The cautious market environment, which helps the precious metal’s safe-haven status, however, cushions the loss. The slowest growth in China’s services sector in eight months, according to a private study, has made investors less interested in risky investments.

Trade concerns between the US and China could act as a tailwind and raise gold prices. China is subject to tariffs, and US Secretary of Commerce Gina Raimondo anticipates no adjustments until the Treasury assessment is finished. Before confirming the recovery from the $1,885 level, traders are waiting for significant follow-through selling. The announcement of the US ISM Services PMI may have an impact on USD price dynamics and give gold some momentum.

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