The ISM Services Purchasing Managers Index reached 54.1 in July, falling short of the 54.5 consensus forecast. While the figure remains marginally above the 12-month average of 53.4, the stagnation in growth has triggered investor anxiety regarding a broader economic deceleration.

Market participants are betting that this cooling performance may compel the Federal Reserve to shift away from its aggressive monetary tightening stance. With thirteen industries reporting growth and four experiencing contraction, the underlying data highlights a fragile expansion. This sentiment has provided a clear catalyst for gold, which continues to trade near session highs as traders price in the potential for a less hawkish central bank outlook.