Gold fell more than 1% during Monday's trading session but recovered after hitting a new six-month low of $2,364 amid massive selling activity around the world.
At 9.30am, the price of gold was at $2,416.33, up 0.19% since it opened in early Asian trading.
Financial markets are pricing in the possibility of a recession in the United States and the potential for a 50 basis point interest rate cut at the September meeting.
It was driven by two less encouraging economic reports from the Institute of Supply Management (ISM) as well as an increase in unemployment figures beyond forecasts.
This sentiment spooked investors following the PMI which revealed the economy continued to grow at a healthier rate. The position supports the currency position of the US dollar and lowers the current level of gold.
The US Dollar Index (DXY) which tracks the performance of six currencies slipped 0.50% to 102.70.
US Treasury bond yields declined with the 10-year down one time basis to 3.78%. However, it is still rebounding from the weekly low of 3.667% during the beginning of the session.
Additionally, rising tensions in the Middle East have limited gold's losses as Israel awaits a response from Iran and Lebanon following the assassination of a Hamas leader.
Media Sky News Arabia reported Iraq revealed that the US base in Iraq was targeted by several missiles.
