Written by Samer Hasn, Senior Market Analyst at XS

Gold continues to reap historic gains today, touching $2,758 per ounce for the first time.

Gold’s rise comes amid heightened political uncertainty, driven by the approaching U.S. presidential election and the tightening poll results between the candidates. The absence of any near prospect for a ceasefire on any of the Middle East’s raging fronts also keeps the yellow metal’s appeal high.

While gold’s continued rise despite the strength of the US dollar and rising Treasury yields seems to reinforce the hypothesis that this rise is driven by increasing uncertainty rather than hope for lower interest rates.

With less than two weeks to go until the presidential election, we see no clear lead for either candidate over the other. Meanwhile, Kamala Harris is 1.7 percentage points ahead of Republican candidate Donald Trump in the average of the polls, according to FiveThirtyEight.

This closeness in the polls may reduce bets on risky assets, which may be volatile sharply after the results are announced, and at the same time, it may boost demand for safe assets.

During the previous two sessions, the largest physical gold exchange-traded fund, SPDR Gold Trust (GLD), attracted net positive inflows of about $580 million, while the iShares Gold Trust (IAU) recorded about $82 million in inflows during the same period.

However, Wall Street does not seem to share the same views. The Wall Street Journal talked about the increasing bets by hedge funds on the possibility of a Donald Trump victory. Some are betting on further strengthening of the dollar as Trump imposes tariffs and reignites trade wars.

This will fuel inflation, which in turn is reflected in the rise in long-term Treasury yields, which reflect expectations of future interest rate hikes.

This in turn may be a negative factor that pressures gold to curb its gains, but in contrast, the International Monetary Fund sees high uncertainty about the future. The trade war and tariffs would disrupt global supply chains and hinder growth in the medium term.

Further, in the Middle East, we have seen increasing talk from the US administration about pushing for a ceasefire, especially with Secretary of State Antony Blinken’s visit to Israel. However, I do not believe that this will lead to any tangible progress towards stopping the war on any of the regional fronts.

Egypt has presented a small proposal for a temporary ceasefire in Gaza. However, this proposal does not seem to lead to anything, especially since the far-right ministers in Israel are opposing it, according to what Israeli officials told Axios earlier this week.

This is regarding a temporary ceasefire, while reaching an agreement for a permanent ceasefire and ending the war will be even more difficult. Hamas also may not accept the return of the hostages unless the war stops, according to The New York Times.

As for Lebanon, Israel has sent to US the conditions for ending its war there, which are believed to be unacceptable to Lebanon because they constitute a violation of sovereignty, according to Axios as well. The conditions include granting Israel the freedom to carry out military operations inside Lebanon.

In addition, Nicholas Kristof says in an opinion piece in The New York Times that he is skeptical about capitalizing on the “opportunity” to stop the war after the killing of Hamas leader Yahya Sinwar due to the lack of significant pressure from the US administration on Israel. He also believes that the momentum around this opportunity may fade in the coming days as the escalation worsens if Israel attacks Iran, prompting the latter to carry out a counter-response.

Instead of seeking to reach an agreement to stop the war, we see growing momentum inside Israel for the idea of ​​resettling the Gaza Strip, which contradicts any peace efforts. The Wall Street Journal mentioned further promote for this idea by members of Prime Minister Benjamin Netanyahu’s Likud party, which describes itself as liberal, and this comes in conjunction with the escalating rhetoric of the extreme religious right about resettlement.

Accordingly, I believe that the increasing talk about the hope that a calm is approaching in this regional war is exaggerated and it will diminish with the coming rounds of escalation.

Gold surged to a new all-time high of $2,740/oz, reflecting heightened demand by genuine buyers who are actively building positions, signaling confidence in gold’s value preservation over time.

The metal’s appeal lies in its ability to provide stability in a relativity fluid macroeconomic environment. With the U.S. election on the horizon, investors are preparing for potential market shifts, which could sustain gold’s upward momentum.

Regardless of the election outcome, expanded fiscal spending appears unavoidable. A red sweep could prioritize defense spending and traditional energy investments while a blue sweep may bring more expansive social programs and green energy investments.

Both scenarios point toward fiscal expansion, which may pressure the U.S. dollar over time, thereby enhancing the appeal of gold.

As Asian currencies remain sensitive to dollar movements, we could see increased demand for gold from these markets as investors seek value protection amidst currency fluctuations.

Gold’s strong rally could extend further toward $2,800-$2,900/oz in the coming months, especially if geopolitical risks persist or market participants anticipate slower monetary tightening.

However, periods of consolidation might occur, especially if higher bond yields temporarily reduce gold’s allure.

Still, buying interest seems well-established, with many investors adopting an accumulate-on-dips approach. If volatility remains elevated and fiscal policies continue expanding, gold’s role as a long-term store of value may solidify further, potentially paving the way for new highs.

Written by Ahmad Assiri Research Strategist at Pepperstone

By Rania Gule Senior Market Analyst

Gold prices dropped sharply yesterday, starting Wednesday’s trading at $2,617 after a strong U.S. jobs report boosted expectations that the Federal Reserve may slow down its rate cuts.

negatively impacted gold, which offered no yield. Additionally, news reports suggesting support from parties in the Middle East conflict for efforts to achieve a ceasefire prompted investors to take profits.

The prospects of easing tensions shifted capital from safe-haven assets like gold to higher-risk assets such as stocks.

At the same time, gold is facing additional pressure from rising U.S. Treasury yields, which remained above 4% following the strong non-farm payroll report. I expect that any reduction in geopolitical tensions will lead to continued selling of gold, especially if U.S. stocks keep gaining amid improved market sentiment.

As investors await U.S. inflation data and the Federal Reserve’s meeting minutes, any further hints about policy stability could push gold prices even lower, particularly if the Fed takes a more cautious approach to rate cuts.

The yellow metal has declined for six consecutive days and remains below the key support level of $2,630. In my view, gold is influenced by several fundamental factors, including the strength of the U.S. dollar, investor expectations of upcoming monetary policy decisions from the Federal Reserve, and recent geopolitical developments.

With the market waiting for the Federal Open Market Committee (FOMC) minutes and U.S. inflation figures, the main question remains: which direction will gold prices take in the coming period?

I believe many traders are preferring to wait before making significant decisions on gold until the release of the Fed minutes.

The minutes are expected to provide a clearer view of the likely path for rate cuts in the U.S. Inflation numbers due in the coming days could also be critical, as their impact will closely align with the Fed’s stance on rate reductions.

Historically, gold prices tend to move inversely to the U.S. dollar; rate cuts usually weaken the dollar and increase demand for gold as a safe-haven asset.

Currently, the U.S. dollar index (DXY) is near a seven-week high, adding pressure on gold prices.

A stronger dollar reinforces the view that the Federal Reserve may not be in a hurry to make significant rate cuts, especially as expectations of a large reduction at the upcoming November meeting have eased.

This scenario, along with a potential ceasefire in the Middle East, has reduced gold’s short-term appeal as a haven.

From an economic and fundamental perspective, it is expected that the Federal Reserve will gradually slow the pace of rate cuts.

Investors are factoring in over an 85% chance that the Fed will cut rates by 25 basis points at the November meeting. If that happens, we might see stability or even a rebound in gold prices, especially if economic conditions remain weak and inflation continues to gradually decline.

Many Federal Reserve officials have recently stated that the current monetary policy aims to control inflation without harming economic growth, which may limit gold’s short-term rise. In my opinion, U.S. Treasury yields play a key role in influencing gold.

The yield on 10-year bonds has surpassed 4%, increasing the pressure on non-yielding gold. When yields are high, investors prefer to hold assets that provide direct returns, such as bonds, over non-yielding assets like gold.

On the geopolitical front, recent reports of a possible ceasefire in the Middle East have provided some relative easing of tensions in the region. While geopolitical conflicts usually support gold as a haven, any positive developments in this area could contribute to further pressure on the yellow metal.

In my view, gold remains in an unstable position for now, as investors closely watch the FOMC minutes and upcoming inflation data. These events could be pivotal in determining gold’s direction in the coming weeks. Despite the current pressures, any indication of easing inflation or U.S. monetary policy could provide new support for gold.

However, the biggest challenge remains how gold will cope with a strong dollar and high bond yields. Therefore, expectations are tied to upcoming economic and geopolitical developments.