• Gold drops 0.70% to $2,504 as US Dollar strengthens and Treasury yields rise following Powell's dovish policy comments.
• DXY up 0.60% to 101.15, propelled by rising 10-year Treasury yield at 3.841%, challenging non-yielding assets like Gold.
• Market anticipates key US data: GDP estimates, Initial Jobless Claims and core PCE inflation gauge this week.
• Gold sees inflows and demand from China yet contends with a stronger US Dollar and rising yields.

Gold prices dropped more than 0.70% on Wednesday as the Greenback staged a comeback after Federal Reserve (Fed) Chair Jerome Powell hinted that the US central bank is ready to ease policy, because policymakers are worried about a weak labor market. The XAU/USD trades at $2,504 after retreating from a daily peak of $2,529.

Wall Street trades with losses ahead of Nvidia’s fiscal Q2 2025 earnings report. The US Dollar hits a three-day high underpinned by heightened US Treasury bond yields, with the US Dollar Index (DXY) sitting at 101.15, gaining 0.60%.

Despite that, the golden metal hovers above $2,500 even though the US 10-year Treasury note yield rises two basis points to 3.841%, a headwind for the non-yielding metal.

Sources cited by Reuters noted, “We're seeing a little pressure coming from a bit firmer dollar. And at this point, we're waiting for further information to drive this market either one direction or the other based on that inflationary data.”

Meanwhile, bullion prices are expected to rise further in the aftermath of Powell’s speech at Jackson Hole, in which he said the time has come to begin lowering borrowing costs amid increased confidence that inflation is headed toward the Fed’s 2% goal.