Ella 
Gold prices are still trading higher despite a stronger U.S. dollar (USD).
Rising U.S. Treasury yields supported the dollar’s gains.
Concerns related to China weighed on gold prices.
Gold prices ended a five-day losing streak and rose near $1,920 during the Asian session on Thursday, with an increase of 0.20%. However, gold faced downward pressure as traders factored in the possibility of the Federal Reserve raising interest rates by 25 basis points by the end of 2023.
Treasury yields continue to be supported by hawkish sentiment ahead of the Federal Reserve’s policy decision at its upcoming meeting in September. This boosts confidence among dollar bulls. At press time, the 10-year U.S. Treasury yield rose 0.05% to 4.28%. The U.S. dollar index (DXY), which measures the greenback’s value against six other major currencies, was hovering around 104.80.
In addition, the U.S. ISM services purchasing managers index (PMI) rose to 54.5 in August, a six-month high, compared with expectations of 52.5 and the previous value of 52.7. The S&P Global Composite and Services Purchasing Managers Index fell to 50.2 and 50.5 respectively, compared with consensus expectations of 50.4 and 51.0. Notably, dovish US data provided support for the greenback.
Investor sentiment remained subdued amid concerns over deteriorating economic conditions in China and ongoing trade tensions between the United States and China. These factors cast a cloud over investor psychology and weakened gold prices.
However, it is worth noting that the prevailing bearish tone in the stock market may provide some limited support to its price, given the precious metal’s safe-haven status.
Escalating trade tensions between the U.S. and China could act as headwinds for gold prices. According to Reuters, U.S. Commerce Secretary Gina Raimondo said that it does not expect to revise the tariffs imposed on China during the Trump administration until the U.S. Treasury Department completes an ongoing review.
