XAU/USD traded around $4,153 per ounce at 9:00 AM Wednesday, down 0.28% since the opening of the Asian session.
Gold's movements continue to be influenced by US bond yields and expectations regarding the Federal Reserve's interest rate trajectory. Lower oil prices have also helped alleviate concerns about inflationary pressure.
US Bond Yields Begin to Retreat
The 10-year US Treasury yield fell by more than 2 basis points to 5.286% after hitting its highest level since April 2002 in the previous session. The 30-year yield declined to 5.661% after reaching a high not seen since May 2002, while the 2-year yield dropped more than 3 basis points to 4.798%.
The decline in bond yields and oil prices has provided some room for gold to recover as concerns regarding inflation and potential further Fed rate hikes begin to subside.
The market currently assigns a probability of approximately 79.5% that the Fed will maintain interest rates at the October meeting, according to the CME FedWatch tool.
Market focus has now shifted to the FOMC meeting minutes, set for release early Thursday morning. The minutes are expected to offer clues regarding the Fed's stance on inflation, the labor market, and the interest rate outlook, following the central bank's rate hike last month—its first in three years.
For now, gold's price action remains heavily dependent on how bond yields and the US dollar react once the FOMC minutes are released.
