Gold prices may rise due to safe haven demand amid uncertainty surrounding the US presidential election and ongoing Middle Eastern hostilities.
On Monday, the gold price (XAUUSD) was trading in positive territory. In the short run, the uncertainties associated with the US presidential election and continued Middle Eastern geopolitical tensions are likely to support gold, a traditional safe-haven asset. However, increasing Greenback demand and rising US bond yields may limit the upside for gold prices, as higher yields make non-yielding assets such as bullion less appealing in contrast.
Traders are bracing for the US election results on Tuesday, ahead of the Fed rate announcement.
Investors will be eagerly watching the upcoming US presidential election on Tuesday. The focus will move to the US Federal Reserve’s (Fed) rate announcement on Thursday. The uncertainty around the outcome of the US election is one reason markets expect the Fed to drop interest rates by the normal 25 basis points (bps) on Thursday, rather than repeat its outsized half-point decrease.
Daily Market movers: Gold price stays robust ahead of the US presidential election.
ETFs projected to enjoy more inflows due to interest rate decreases, big budget deficits, and highly valued stock markets. However, the outcome of the US elections may have a significant impact on fourth-quarter investment demand. The central bank’s gold purchases are expected to be substantial again this year, but not to the extent witnessed in the previous two years. Jewelry demand is likewise likely to be lower than the previous year, albeit slightly higher than previously predicted by the WGC,” according to Commerzbank analysts.
PredictIt has given Harris a 51% chance of winning on Tuesday, the vice president’s first lead over Trump on the site since October 9.
The US NFP rose by 12K in October, the smallest increase since December 2020. This statistic followed the 223K gain (updated from 254K in September) and was far lower than the market consensus of 113K.
In October, the unemployment rate remained constant at 4.1%, matching predictions.
Financial markets have fully priced a 25 basis point (bps) rate drop by the US Federal Reserve. (Fed) held its November meeting on Thursday.
