Gold price extends a two-day losing spell on firmer US $

Gold price extends a two-day losing spell as investors channel funds into the US Dollar.

US recession fears recede sharply due to cooling inflationary pressures and stable job growth.

US ISM Services PMI for August landed at 54.5 vs. expectations of 52.5 and July's reading of 52.7.

Gold price (XAU/USD) extends correction after a speech from Boston Fed President Susan Collins and upbeat US ISM Services PMI for August. Fed Collins cited that this phase of monetary policy calls for patience and policy decisions will be based on incoming data. The ISM reported a sharp increase in service activities to 54.5 vs. expectations of 52.5 and July's reading of 52.7.

The precious metal remains under pressure as investors keep pumping money into the US Dollar due to deepening global recession fears. Investors underpinned the US Dollar as a safe haven as developing economies are facing the wrath of higher interest rates from Western central banks and potential upside risks of deflation to the Chinese economy.

Fundamentally, it doesn’t seem bad for the Gold price as the US Unemployment Rate rose sharply to 3.8% and wage growth slowed in August. Investors hope that the Federal Reserve (Fed) is done with hiking interest rates. Fed Governor Christopher Waller supported the view, citing the latest batch of economic data that has provided more room for the central bank to assess whether the cost of borrowing needs to be increased again.

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