Gold eased on Wednesday, after rising over 1% in the previous session on fears of a possible recession, but held close to a more than six-year high on hopes of a rate cut by the US central bank and uncertainties around the Sino-US trade talks.
Spot gold was down 0.1% at $1,540.40 per ounce, as of 0724 GMT. On Monday it touched $1,554.56, its highest in over six-years.
US gold futures were down 0.1% at $1,550.50 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.
Adding some pressure on bullion was a firm dollar, while Asian equities posted modest gains.
Gold rose more than 1% in the previous session as an inversion in the US yield curve and disappointing US 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% chance of a 25 basis-point rate cut by the US central bank next month.
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