Gold rise again amid Middle East tensions and US election concerns.
Gold price (XAUUSD) gains some traction and climbs to the $2,757-2,758 range during the Asian session on Tuesday, bringing it closer to the record high set last week. Persistent safe-haven demand as a result of Middle East tensions and US election fears proves to be a significant tailwind for the precious metal. Furthermore, declining US Treasury bond yields maintain the US Dollar (USD) bulls are on the defensive, with the currency trading below its best level since July 30 on Monday, lending support to the commodities.
Bets expecting lesser Fed rate cuts continue to underpin rising US bond rates and the dollar.
The bets on a less aggressive policy easing by the Federal Reserve (Fed), along with concerns about deficit spending following the US election, should limit the downside for US bond yields and the USD. Aside from that, the underlying positive tone in global financial markets has capped the gold price. Investors appear cautious ahead of this week’s key US macroeconomic reports, which include the Advance Q3 GDP print, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
Daily Digest Market Movers: The gold price is supported by global uncertainties and US political instability.
Falling US Treasury bond yields spurred An intraday US Dollar decline from its highest level since July 30 helped the Gold price attract some dip-buyers near the $2,725 mark at the start of an interesting week.
The latest positive US macro data has tempered expectations for another big rate drop by the Federal Reserve, which should work as a tailwind for US bond yields despite deficit-spending concerns following the November 5 US election.
With the US presidential election coming, Vice President Kamala Harris and Republican contender Donald Trump are in a knife-edge race for the White House, adding to market volatility.
The US warned Iran before the United Nations Security Council of dire consequences if it engages in any more hostile acts against Israel. In retaliation for the latter’s weekend strikes on military targets in Iran.
China’s gold consumption in the first three quarters of 2024 fell 11.18% from the same period a year ago, the state-backed gold organization reported on Monday, as high prices dampened buying interest in jewelry products.
Investors are now looking to Tuesday’s US economic calendar, which includes the release of the Conference Board’s Consumer Confidence Index and Job Openings and Labor Turnover Survey (JOLTS), for short-term possibilities.
This, combined with a slew of US economic data due this week, should provide clues regarding the Fed’s interest rate stance, influencing USD price dynamics and providing a new directional impetus to the XAUUSD.
