Gold rebounded on Wednesday after falling to a weekly low of $2,605 as the US dollar weakened in response to the release of US economic data and the fall in US Treasury yields.
At 9.25 am, gold was at $2,624.27, down 0.43% since it opened in early trading on Thursday in the Asian session.
The market mood turned slightly gloomy as the US equity market prepared for the Thanksgiving holiday.
Meanwhile, the Federal Reserve's (Fed) preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index, justified the Fed's gradual approach and expected a reduction in borrowing costs at the December meeting.
Other data showed that the economy remained robust after the release of the second estimate of third-quarter Gross Domestic Product (GDP).
At the same time, employment data revealed that the labor market remained strong as the number of Americans applying for unemployment benefits fell below expectations.
In addition, falling US Treasury yields dragged the USD lower. The US Dollar Index (DXY) that tracks the performance of six currencies against the greenback fell 0.78% to 106.04.
The yellow metal recovered despite Hezbollah and Israel agreeing to a ceasefire. However, the escalation of the Russia-Ukraine conflict could cause buyers to turn to the metal to avoid sustaining a higher trend.
According to CME FedWatch Tool data, the market now sees a 70% chance of a quarter-point rate cut in December.
