Gold prices are holding steady between $2,750 and $2,720 as investors weigh factors influencing demand, including geopolitical tensions in the Middle East, the upcoming U.S. elections, and economic data due this week.
The recent decline in the U.S. dollar has provided minor support to the precious metal, though prices remain under pressure.
Expectations around potential U.S. interest rate cuts and concerns over deficit spending after the November election have elevated U.S. Treasury yields, limiting gold’s upward momentum. Key U.S. economic reports, such as GDP and employment data, also create market uncertainty, with traders adopting a cautious stance.
Analysts note that political factors will likely influence gold prices in the coming weeks. With a close race between Vice President Kamala Harris and former President Donald Trump, the U.S. election has added to investor caution amid fears of increased deficit spending.
Meanwhile, U.S. economic resilience, indicated by better-than-expected durable goods orders and consumer sentiment, has bolstered the dollar, keeping pressure on gold.
Geopolitical tensions in the Middle East have supported gold as a haven.
However, reports suggesting a possible ceasefire have tempered the impact. In China, the world’s largest consumer of gold, demand fell by over 11% in the first three quarters of the year, with jewellery demand down 27%. However, gold bars and coins investment rose by 27%, indicating ongoing interest despite high prices.
Analysts suggest that gold prices are likely to remain range-bound until critical economic data is released, with the possibility of quick adjustments depending on geopolitical and financial developments.
