Gold prices continue to rise in the face of US election uncertainty and Middle East tensions.
Gold prices (XAUUSD) rose to a new record high during the Asian session on Wednesday, as concerns over the US presidential election and the Middle East conflict fueled demand for traditional safe-haven assets. Aside from that, a minor drop in US Treasury bond yields and muted US Dollar (USD) price action help the precious metal. The supporting factors, to a greater extent, overwhelm the buoyant market sentiment, tends to devalue the commodity.
Even prospects for fewer interest rate cuts by the Federal Reserve (Fed) and higher US Treasury bond yields do little to mask the underlying optimistic feeling surrounding the non-yielding gold price. It remains to be seen whether bulls can continue on their momentum under slightly overbought conditions on the daily chart and ahead of crucial US macro announcements. The data could provide clues about the Fed’s rate outlook and determine the next leg of a directional move for the XAUUSD.
Daily Market Movers: Gold gains amid US political uncertainty and Middle East concerns.
Republican former US President Donald Trump and Democratic Vice President Kamala Harris caught in a close battle for the White House, fueling political Uncertainty drove the gold price to a new record high on Wednesday.
On Tuesday, Israeli forces struck a residential building in northern Gaza, killing approximately 100 people. This comes days after the Israeli military revealed on Sunday that the air force carried out a precise attack against Hamas fighters.
Moreover The news increases the possibility of future escalation of Middle Eastern tensions and contributes to the bid tone surrounding the safe-haven Gold(XAUUSD), offsetting the recent rise in US Treasury bond yields and the US Dollar.
The incoming US macro data revealed that the US economy is on a good footing, supporting market expectations for a less aggressive policy easing by the Federal Reserve and the possibilities for lower interest rate cuts.
The Conference Board said on Tuesday that the US Consumer Confidence Index increased to a nine-month high of 108.7 in October, up from an upwardly revised 99.2 in September.
Furthermore This reflected optimism in business conditions and the labor market, overshadowing the negative labor Openings and Labor Turnover Survey, or JOLTS, report, which revealed that vacancies fell to more than a three-and-a-half year low in September.
Aside from that, deficit-spending fears following the November 5 US presidential election maintain US bond yields up near a multi-month high, but do little to impede the precious metal’s subsequent positive advance.
Traders are now waiting for key US macroeconomic data before positioning for further increases.
Traders are now looking to Wednesday’s US economic docket, which includes the release of the ADP report on private-sector jobs and the Advance The GDP report is likely to reveal that the economy grew at a 3% annualized rate in Q3.
Moreover The market will then focus on the US Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred inflation gauge, on Thursday and the much watched US Nonfarm Payrolls (NFP) report on Friday.
