Gold prices eased on August 28 after rising by over one percent in the preceding sessions on the back of recession concerns.
Spot gold was down 0.4 percent at $1,535.69 per ounce, as of 04.26 GMT. While this is relaxed compared to $1,554.56 on August 27, the rate is still trending at a six-year high due to uncertainty around the US-China trade stand-off and hopes for a rate cut by the US Central Bank.
US gold futures were down 0.4 percent at $1,545.10 an ounce.
"It is more of a corrective move. We saw prices close above the resistance at $1,535 over the past 24 hours... So, gold is retesting the $1,535 level which is common when you break a technical level," said Ilya Spivak, senior currency strategist with DailyFx.
Gold rose more than 1 percent in the previous session as an inversion in the US yield curve and disappointing U.S. economic data rekindled fears of a looming recession amid uncertainties in the US-China trade dispute. The yield curve inversion deepened to levels not seen since 2007.
"People are beginning to think that the economy is not doing that well, there could be a possible recession, or more likely, a slowing economy, which means the Federal Reserve will have to cut rates and that supports gold," said John Sharma, an economist with National Australia Bank.
Federal funds futures implied traders saw a 91 percent chance of a 25 basis-point rate cut by the US central bank next month. Sharma also said that as long as the China-US trade issue continues, gold will be well supported.
US President Donald Trump on August 26 predicted a trade deal with China but optimism wilted after China's foreign ministry spokesperson dismissed claims that there had been phone calls between the two sides.
However, "if there are some sort of tangible signs that the (US-China trade) talks are going to restart, or at least that they are getting there: it would be a risk-on outcome and we can see yields go higher and push gold a bit lower," DailyFx's Spivak said.
Elesewhere, spot silver was steady at $18.16 an ounce, having earlier touched $18.34, its highest level since April 2017. Platinum climbed 0.4 percent to $868.70 an ounce, after touching its highest in nearly a month earlier in the session, while palladium eased 0.3 percent to $1,477.
(With inputs from Reuters)
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