Gold Edges Higher as U.S. Yields Ease from Recent Highs

Gold prices edged higher in early Asian trade on Wednesday as U.S. Treasury yields eased from recent highs. The precious metal, known for its inflation-hedging properties, saw spot gold rise 0.2% to $4,342.33 per ounce.

The rebound comes after a nearly 2% drop on Tuesday. Meanwhile, U.S. gold futures for December delivery slipped 0.6% lower to $4,396.30.

U.S. yields backed off earlier highs, switching directions amid a global bond selloff that saw long-term borrowing costs in major economies edge toward their highest levels in decades. This move could bolster the case for higher interest rates to rein in inflation, despite recent U.S. economic indicators showing unexpected employment losses and milder inflation.

Traders are currently pricing in a 65% probability that the Federal Reserve will keep rates unchanged and a 35% chance of a rate hike in September, according to the CME FedWatch Tool. The Bank of England is also expected to leave interest rates unchanged at 3.75% for the rest of the year.

The focus now shifts to the release of the Federal Reserve's meeting minutes, due at 1800 GMT. Market participants await the update on monetary policy-setting, which could influence gold prices and other assets.