Gold continues to trade below the crucial resistance level of $2,400, which could potentially drive the yellow metal's prices down to $2,378, a significant long zone.

• Weak U.S. economic data has revealed that the world's largest economy is slowing down faster than initially expected. This, in turn, has heightened speculation about larger interest rate cuts by the Federal Reserve, which supports the non-yielding yellow metal.

• Additionally, concerns about an economic slowdown in China and the possibility of escalating military tensions in the Middle East bolster support for gold as a haven. However, a notable rise in demand for the U.S. dollar, supported by a further recovery in U.S. Treasury yields, may limit any upward movement in gold prices.

• U.S. Treasury yields continue to advance, marking their largest increase since early June, which supports the U.S. dollar and diminishes the appeal of gold.

• Government data released on Tuesday showed that the U.S. trade deficit fell by 2.5% to $73.1 billion in June from $75.0 billion in May, due to a 1.5% increase in exports of aircraft and U.S.-produced oil and gas.

• Markets are pricing in a 100% chance that the Federal Reserve might start lowering borrowing costs at the upcoming policy meeting in September, with a near 70% probability of a 50-basis-point cut.

• Such a scenario would likely stabilize U.S. Treasury yields and the U.S. dollar, which, along with geopolitical risks arising from ongoing conflicts in the Middle East, could act as a support for gold.

• Markets may now transition into a traditional pattern of calm in the absence of significant U.S. economic data, waiting for a strong fundamental catalyst to drive price actions.

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