On Wednesday (August 3), the international gold price rose, and the market outlook is still looking at $1,793. Prevailing risk aversion further favored the precious metals as tense geopolitical tensions offset pressure from rising U.S. Treasury yields following hawkish comments from Fed officials on rate hikes.

At 15:17 Beijing time, spot gold rose 0.36% to US$1,766.77 per ounce; the US dollar index fell 0.11% to 106.225.

DailyFX FX Strategist Ilya Spivak said: “Gold tested $1,785-$1,790 range resistance overnight, but was unsuccessful... The market has become more skeptical of the Fed’s reversal of monetary policy tightening. Also, gold does indeed trade at a time of geopolitical tensions. There tends to be a little bit of appeal.”

Three Fed policymakers said on Tuesday (August 2) that they will not ease tightening policy aimed at curbing inflation at the highest level since the 1980s, even though it would bring interest rates to levels that would more significantly dampen economic activity.

Market sentiment remains fragile amid growing fears of a global recession. These factors should continue to provide some support for gold ahead of Friday's (August 5) U.S. nonfarm payrolls report for July.

Investors, therefore, would be prudent to wait for another strong sell-off to follow before confirming whether gold's recent rally from a July 2021 low of $1,680.79 hit in July has run out of steam.

On the hourly chart, the price of gold found support near $1,750, and after the adjustment, it will hit $1,788, the high since July 5, which was set overnight. On the daily chart, the price of gold has started an upward iii-wave trend from $1,711, with the upper resistance looking at the 138.2% target at $1,793 and the 161.8% target at $1,807. Wave iii is a sub-wave of the up (i) wave that started at $1680.