Gold prices fell slightly on Wednesday after hitting over five-week high in the previous session on the dollar's weakness.
Spot gold eased 0.4 percent to $1,236.11 an ounce after touching its highest level since October 26 at $1,241.86 an ounce on Tuesday. U.S. gold futures were also down 0.4 percent at $1,241.55 an ounce.
The U.S. dollar held steady today after the Chinese Commerce Ministry said that the weekend meeting between Trump and Xi was very successful and the working groups of the two states will actively hold consultations for 90 days in accordance with the agreement and the road map.
Nevertheless, the outlook for the dollar remains bearish in the near term due to declining Treasury yields and renewed concerns over economic growth.
The bond market is flashing warning signs after the U.S. Treasury curve inverted for the first time in more than a decade. This happens when short-term rates rise above longer rates.
The yield curve is now at its flattest level since before the past recession in view of more dovish comments from the Federal Reserve.
Many associate a yield curve inversion with recession at some point in the future.