• Gold is down more than 1% on a daily basis on Wednesday.
• 10-year US Treasury bond yield surges higher in the American session.
• Hawkish Fed bets provide a boost to the greenback after latest data releases.

Gold came under renewed bearish pressure and dropped toward $1,700 during the American trading hours on Wednesday. As of writing, XAU/USD was down 1.25% on the day at $1,705.

USD rises alongside US yields

The impressive rebound witnessed in US Treasury bond yields amid hawkish Fed bets weighs heavily on the precious metal mid-week. Following the sharp decline seen earlier in the week, the benchmark 10-year US Treasury bond yield is up more than 4% on a daily basis at 3.78%. According to the CME Group FedWatch Tool, markets are pricing in a 68% probability of a 75 basis points rate hike in November.

The data from the US showed on Wednesday that private sector employment rose by 208,000 in September, higher than the market expectation of 200,000.

Additionally, the ISM Services PMI came in at 56.7, showing that the business activity in the service sector continued to expand at a healthy pace in September. More importantly, the Employment Index of the PMI survey recovered to 53 from 50.2, reviving expectations for another strong Nonfarm Payrolls report on Friday. The US Dollar Index is up 1.33% on the day, reflecting the positive impact of Wednesday's data on the dollar's valuation.

There won't be any other high-tier macroeconomic data releases later in the day and the US yields' movements are likely to continue to impact the inversely-correlated XAU/USD's action.

Technical levels to watch for