Gold prices rebounded after retracing to a certain extent from a new high yesterday.
The asset could remain exposed to a stronger dollar and rising Treasury yields, led by increasing expectations that the Federal Reserve could take a cautious approach to monetary policy easing.
Despite these headwinds, gold’s upside remains supported by its safe-haven status amid ongoing geopolitical tensions in the Middle East. With a de-escalation still appearing elusive, risk levels remain elevated, thereby supporting demand for the precious metal.
The uncertainty surrounding the upcoming U.S. presidential election, coupled with polls suggesting a potential Trump victory, has heightened demand for gold as a hedge against possible market volatility. Additionally, monetary policy easing by major central banks worldwide continues to provide extra support for gold prices.
Looking ahead, the market could react to US economic data releases where a surprise could lead to some volatility. A stronger US economy could support a slower monetary easing and could weigh further on gold prices.
