The price of gold jumped another 0.7% after rising 0.5% yesterday. Against the background of the latest rally, the precious metal has updated the record high set in September.
Gold was supported by a drop in US bond yields, as well as a slightly risk-off environment. The yield on 10-year U.S. Treasury bonds fell by 3 basis points to 4,008%, reaching its lowest level since October 8, making non-yielding gold more attractive. However, the US Dollar Currency Index (DXY) is consolidating near its highest level since October 8, which limits the growth of gold prices.
The next catalyst for the precious metal will be US economic data, which will help clarify the prospects for easing the Fed's monetary policy. The focus will be on data on retail sales and industrial production for September, weekly statistics on applications for unemployment benefits, as well as several reports on the real estate market, which will be released later this week. According to the CME FedWatch Tool, markets see a 94.1% probability of a 0.25% rate cut at the November meeting (compared to 80.3% a week earlier) and a 86.2% probability of a 0.25% rate cut in December (compared to 79.1% a week earlier), with a 0.46% rate cut expected by the end of the year.
"The uncertainty surrounding the US elections and geopolitical tensions will also support gold in the future," ANZ experts said.