Oct 21 2024, 08:19
Gold prices strengthened near $2,720 in early Asian session on Monday. Uncertainty surrounding US elections and geopolitical risks boosted demand for safe-haven assets such as Gold.
Concerns over China’s economic slowdown could weigh on XAU/USD. Gold prices (XAU/USD) extended gains to around $2,720 during early Asian session on Monday. Uncertainty surrounding tensions in the Middle East and US presidential election boosted safe-haven inflows.
The precious metal’s rise was supported by ongoing geopolitical tensions in the Middle East, uncertainty surrounding US elections, and easing monetary policy expectations from the US Federal Reserve (Fed). “With the escalating conflict – especially after Hezbollah’s announcement to escalate the war with Israel – investors flocked to gold, a traditional safe-haven asset,” said Alexander Zumpfe, precious metals trader at Heraeus Metals in Germany. “Adding to the momentum, concerns surrounding the US presidential election and anticipation of looser monetary policy have further fueled the rally,” Zumpfe added.
Furthermore, prospects of further Fed rate cuts continue to support Gold prices. The US central bank cut interest rates for the first time in more than four years at its September meeting. According to the CME FedWatch Tool, the odds of an additional quarter-point rate cut in November are over 90%. Lower interest rates generally reduce the opportunity cost of holding non-yielding bullion, thus driving up Gold prices.
Source: FXStreet
