Gold price attracts dip buyers and supported by a variety of factors.
The gold price (XAUUSD) maintains its intraday gains through the first half of the European day, trading at $2,735 just below the all-time high reached the previous day.
The US political uncertainties and Middle East tensions support the safe-haven XAUUSD.
In the face of persisting geopolitical dangers from ongoing conflicts in the Middle East, the uncertainty surrounding the November 5 US Presidential election serves as a tailwind for the safe-haven precious metal.
Moreover, the anticipated interest rate decreases by Demand for non-yielding gold supported by major central banks and a small drop in the US dollar (USD). Meanwhile, predictions of less aggressive policy easing by the Federal Reserve (Fed) pushed US Treasury bond rates to their highest level in nearly three months. This could limit the USD’s corrective decline and curb gains in the commodity under slightly overbought conditions.
Daily Market Movers: Gold price continues supported by rate cut bets, geopolitical threats, and US political instability.
A rocket from Lebanon landed in an open region in central Israel, prompting the latter to warn of additional assaults on Hezbollah after hitting the Iran-backed group’s financial operations.
Last Monday, the European Central Bank reduced interest rates for the third time this year. The first back-to-back rate reduction in 13 years, with more expected amid an economic downturn.
Weak inflation data from the UK has strengthened betting on further aggressive rate cuts by the Bank of England, and the Federal Reserve is expected to slash borrowing costs even further.
According to polls, Vice President Kamala Harris and former President Donald Trump remain in a close race as the November 5 US Presidential election approaches.
Meanwhile, growing concerns that Donald Trump’s victory could result in the imposition of additional possibly inflationary taxes spurred an overnight selloff in US government debt.
The softening monetary policy environment counteracts rising US bond yields while simultaneously providing support.
The markets have entirely priced out the likelihood of another huge interest rate decrease by the Fed in November, raising the US Treasury bond yields to roughly three months. highs.
The US dollar maintains its recent strong advances, reaching its highest level since early August, but does little to damage the underlying strong optimistic feeling around the gold price.
Traders are currently anticipating the release of the Richmond Manufacturing Index, which, together with Philadelphia Fed President Patrick Harker’s speech, may add some impetus to the XAUUSD.
