• Gold turns lower for the third straight day and drops to over a one-week low on Wednesday.
• Hawkish Fed expectations, rising US bond yields underpin the USD and exert some pressure.
• The risk-off mood fails to lend support to the safe-haven XAU/USD ahead of FOMC minutes.

Gold attracts fresh selling near the $1,782 region on Wednesday and turns lower for the third straight day. The intraday selling bias remains unabated through the early North American session and drags the XAU/USD to a one-and-half-week low, around the $1,765-$1,764 area in the last hour.

The US dollar ticks higher, back closer to the monthly top touched the previous day, which turns out to be a key factor denting demand for the dollar-denominated gold. Despite signs of easing US inflation, investors seem convinced that the Fed would stick to its policy tightening path. Wednesday's mostly upbeat US Retail Sales data reaffirms market bets and continues to act as a tailwind for the buck.

Hawkish Fed expectations, meanwhile, trigger a fresh leg up in the US Treasury bond yields. This offers additional support to the greenback and further contributes to driving flows away from the non-yielding yellow metal. That said, growing recession fears, along with the risk-off impulse, could extend some support to the safe-haven gold and help limit any further losses, at least for the time being.

Worries about a global economic downturn temper investors' appetite for perceived riskier assets, which is evident from a generally weaker tone around the equity markets. This might hold back bearish traders to place aggressive bets ahead of the FOMC meeting minutes, scheduled for release later during the US session. Market players will look for clues about the possibility of a 75 bps rate hike in September.

The Fed's policy outlook would play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to gold. From a technical perspective, the recent repeated failures to find acceptance, or build on the momentum beyond the $1,800 mark supports prospects for a further near-term depreciating move. Hence, any attempted recovery could still be seen as a selling opportunity.

Technical levels to watch