• Gold price drops from daily highs as better global risk sentiment diminishes safe-haven demand.
• A dip in US Treasury yields places additional pressure on the US Dollar amidst hawkish Fed remarks.
• Easing Middle East tensions sway Gold market, forthcoming US sanctions on Iran could influence future precious metal prices.

Gold prices retreated from close to weekly highs during the North American session on Wednesday amid an improvement in risk appetite. The bullish impulse arrived despite hawkish commentary by US Federal Reserve (Fed) officials. US Treasury bond yields dropped and undermined the Greenback, capping Gold’s plunge.

XAU/USD trades at $2,375, down 0.34%, after hitting a daily high of $2,395, just shy of surpassing $2,400. Tensions in the Middle East had subsided after Israeli officials commented that they considered striking Iran on Monday but decided to wait, according to Axios. In the meantime, the US will impose new sanctions on Iran in the upcoming days, said Jake Sullivan, the White House National Security Advisor.

Back to economic themes, Fed Chair Jerome Powell said the US economy has performed quite strongly while acknowledging that recent data shows the lack of further progress on inflation.