Gold continued to rise and reached a new record high.
On the opening day of a new week, the gold price (XAUUSD) rises for the fifth day in a row, marking the seventh day of a positive advance in the previous eight, and reaches a new record high of $2,732-2,733.
Major central banks continue to decrease interest rates, which benefits the XAUUSD pair.
The easing of monetary policy and bets on more interest rate reduction by major central banks continue to drive flows into the non-yielding yellow metal. Aside from this, continuing geopolitical dangers arising The continuous wars in the Middle East, as well as political uncertainties in the United States, add to the demand for safe haven assets.
Meanwhile, increased market confidence that the Federal Reserve (Fed) will proceed with small rate decreases helps the US Dollar (USD) attract some dip-buying and halts its modest decline from the highest level since early August, reached last week. This, together with increased US Treasury bond yields, acts as a headwind for gold prices. Traders may also avoid initiating new bullish wagers on the XAUUSD despite somewhat overbought conditions on the daily chart. Nonetheless, the fundamental backdrop suggests that the recent well-established rally will continue.
Daily Market Movers: The gold price is strongly supported by rate decrease predictions.
A combination of supportive factors helps the gold price maintain its recent well-established uptrend and reach a new all-time high during the Asian session on Monday.
Tensions and disputes in the Middle East remain high, despite the death of Hamas leader Yahya Sinwar, as Israel prepared to retaliate to Iran’s early-October strike.
Israel’s Prime Minister Benjamin Netanyahu stated that an attack on his private residence by Iran’s Lebanese proxy Hezbollah would not dissuade him from continuing the fight.
The Israeli military conducted a series of air strikes across Lebanon and expanded attacks in Gaza, heightening the prospect of a full-fledged regional conflict in the Middle East.
Recent polls show a close race between Donald Trump and Vice President Kamala Harris, adding a layer of uncertainty, benefitting the safe-haven currency XAUUSD.
European Central Bank voted last week to drop interest rates for the third time this year.
The European Central Bank voted last week to drop interest rates for the third time this year, marking the first back-to-back rate cuts in 13 years, and plans to lower them further.
The Federal Reserve is also expected to decrease borrowing costs further, while dismal inflation data in the UK has strengthened expectations on a more aggressive reduction by the Bank of England.
Investors have entirely priced out the likelihood of another big interest rate decrease by the Fed in November, as incoming macro data continue to show a strong US economy.
Atlanta Fed President Raphael Bostic stated that he is not in a rush to drop rates and sees the case for a reduction in the
The policy rate will be between 3% and 3.5% by the end of next year.
The yield on the benchmark 10-year US government bond remains above 4%, acting as a tailwind for the USD, while it does nothing to slow the commodity’s upward trend.
Investors continue to celebrate the People’s Bank of China’s announcement on Friday of two funding schemes targeted at promoting capital market expansion.
