Gold Continues Decline, Hovering Around $2,400
Gold prices have extended their losses for a fourth consecutive day, with the XAU/USD trading at $2,397, down 0.14%. Despite this drop, prices remain near the $2,400 mark, constrained by rising US Treasury bond yields. The greenback has also stayed firm as investors process the news of President Joe Biden exiting the presidential race and endorsing Vice President Kamala Harris to challenge former President Donald Trump in the November 5 elections.
Wall Street began the week positively, potentially signaling market approval of Biden’s decision. Concurrently, the yield on the US 10-year benchmark note increased by two basis points to 4.26%, posing a headwind for gold prices.
An analyst at StoneX noted that a Trump victory could be beneficial for gold due to his proposals for tax cuts, reduced regulation, and an expanded budget deficit. “Trump’s policies would likely be inflationary and could cause geopolitical tensions, favoring gold in the short term. However, Harris’s foreign policy stance remains undefined, which may support gold prices now but not necessarily in the long term.”
Traders are also focused on upcoming economic indicators, including the preliminary second-quarter Gross Domestic Product (GDP) figures and the Federal Reserve’s preferred inflation gauge, the Core Personal Consumption Expenditure (PCE) Price Index.
The US Dollar Index (DXY), which measures the dollar’s strength against six other currencies, remains virtually unchanged at 104.34, keeping gold prices below the $2,400 threshold.
