Gold rebounds above $1,500, remains stuck in tight range

After closing the previous day at $1,506, the XAU/USD pair edged lower on Wednesday as the recovering market sentiment made it difficult for the precious metal to find demand as a safe-haven. However, the pair found support near $1,497 and erased a portion of its daily losses in the last couple of hours and was last seen trading at $1,501.85, still losing 0.37% on a daily basis.

Earlier today, China's Foreign Ministry adopted a softer tone while commenting on the US-China trade dispute and allowed risk-appetite to return to markets. "The US-China relationship is one of the most important bilateral relationships in the world," the ministry said. "It's natural for the US and China to have differences on trade, the key is to resolve the issue through dialogue."

The 10-year US Treasury bond yield gained traction on these comments to reflect the risk-on atmosphere and major European equity indexes advanced higher to confirm that.

Eyes on FOMC

Meanwhile, the Greenback stays relatively calm as markets are waiting for the FOMC to release the minutes of its July 30-31 meeting later in the day. Commenting on the Federal Reserve's possible policy outlook, "The stronger USD, rising unit labour costs, supply-chain disruptions and weaker revenue from abroad may soon combine to squeeze corporate margins and sap hiring. Meanwhile, core inflation remains below the FOMC’s medium-term 2% objective,” said Standard Chartered analysts and argued that this would cause the FOMC to ease further in the second half of the year. Ahead of this event, the US Dollar Index is posting small daily gains at 98.18.

Technical levels to consider