Gold prices edged lower on Wednesday as the US dollar and Treasury yields strengthened, while traders awaited further cues to gauge the size of the Federal Reserve’s likely September interest rate cut.

Spot gold slipped 0.2% to $2,385.60 per ounce, as of 0310 GMT.

US gold futures fell 0.3% to $2,425.30.

“A rebound in US Treasury yields and a firmer dollar translate to some downward pressures on gold prices this morning, as pockets of resilience in US economic data seem to prompt a reassessment of market recession concerns,” said IG market strategist Yeap Jun Rong.

Downside in gold may be limited by ongoing Middle East tensions and lingering global recession concerns, as markets await further economic data for clarity on US conditions, Yeap added.

The dollar index rose to 103.25, making the greenback-priced bullion less affordable for overseas buyers.

Traders have altered their rate cut expectations following the soft jobs report last week, with nearly 105 basis points of cuts anticipated by year-end.

However, markets are also pricing in a 65% chance of the Fed cutting rates by 50 bps in September, CME FedWatch tool showed, compared with 85% a day ago.

San Francisco Fed President Mary Daly said on Monday that many details in the jobs report leave “a little more room for confidence that we’re slowing but not falling off a cliff.”

Gold falls over 2% in volatile market but retains safe-haven appeal

The United States has communicated to Iran and Israel that conflict in the Middle East must not escalate, Secretary of State Antony Blinken said on Tuesday, even as the Pentagon warned that it would not tolerate attacks against its forces in the region.

Spot silver edged 0.1% higher to $27.0561 per ounce, platinum rose 0.3% to $915.20 and palladium was up 0.3% to $877.24.