Gold starts consolidating daily gains, trades below $1,500
|- Wall Street's main indexes fall sharply on Wednesday.
- 10-year United States (US) Treasury bond yield is down nearly 3%.
- US Dollar Index edges lower toward the 99 mark.
The XAU/USD pair build on Tuesday recovery gains and rose above the critical $1,500 mark before going into a consolidation phase a little below that level. As of writing, the pair was up nearly $20, or 1.35%, on the day at $1,499.
Risk-aversion continues to dominate the markets
The protracted selling pressure surrounding the Greenback and risk-off flows on Wednesday seem to be driving the pair higher.
Heightened fears of a possible recession in the United States after the Institue for Supply Management's (ISM) Purchasing Managers' Index (PMI) data on Tuesday showed that the business activity in the manufacturing sector contracted at its strongest pace in nearly ten years, caused risk-off flows to take control of the market action.
The 10-year US Treasury bond yield is now losing nearly 3% on the day and Wall Street's three main indexes are all down around 2% to confirm the sour market sentiment.
Earlier in the day, the Automatic Data Processing's (ADP) monthly report revealed that private sector employment in the US increased by 135,000 to miss the market expectation of 140,000 and forced the US Dollar Index (DXY) to push lower. At the moment, the DXY, which tested the 99 handle in the last hour, was erasing 0.1% at 99.10.
There won't be any other macroeconomic data releases from the US in the remainder of the day and the performance of major equity indexes in Asia is likely to impact the precious metal's action in the early trading hours of the Asian session.
Technical levels to watch for
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.