Could gold reshine on Thursday?

Following a five-day losing skid, the price of gold has increased from a one-week low to $1,918 on Thursday during the Asian session. Because of the strengthening US Dollar, rising US Treasury bond yields, worries about China, and other factors, the price of gold is declining.

The US ISM Services PMI increased to a six-month high of 54.5 in August, while the US Dollar Index reached its highest level since March 15 as well. The S&P Global Composite and Services PMI final values for the aforementioned month decreased from initial estimates of 50.4 and 51.0 in that order to 50.2 and 50.5, respectively.

The US Factory Orders for July dropped to the lowest since mid-2020, but the details about the orders excluding transport, shipments of goods, and inventories were impressive to defend the hawkish Fed bias.

Fed’s Christopher Waller defended hawkish monetary policy during a CNBC interview, and Cleveland Federal Reserve President Loretta Mester ruled out rate cuts. However, Fed’s Susan Collins cited the risk of an overly restrictive stance on monetary policy to suggest the need for a patient and careful, but deliberate, approach.

Economic fears surrounding China, the Eurozone, and the UK seem to also direct market players toward the Greenback and amplify the bearish bias about the Gold Price. Downbeat concerns about China, one of the world’s biggest gold customers, also weighed on the precious metal.

Early-week disappointment from China Caixin Services PMI joined the market’s lack of confidence in the Dragon Nation’s stimulus to weigh on the concerns about Beijing, as well as the Gold Price. On the same line could be the US-China tension surrounding the trade conditions and Taiwan.

The US 10-year Treasury bond yields increased to a two-week high of almost 4.30%, and the two-year updated weekly peak was above 5.0%. As a result, the US Dollar gained significant strength and the buyers of gold were favoured. The Wall Street benchmark saw a second straight day of negative closing prices, which hampered demand for risky assets like gold. There are numerous Federal Reserve (Fed) speakers planned to deliver talks, which can increase market volatility and make it more crucial to monitor changes in the price of gold. These speakers should be watched for clear directions.

For new inspiration, news reports on Sino-American conflict, the Chinese economy, and major economies outside the US are all crucial.