Gold steadies at fresh highs on uncertainty ahead of US presidential election

LONDON (October 30) Gold price (XAU/USD) has stretched to fresh record highs on Wednesday, favored by a combination of higher demand for safe-haven assets amid the US political uncertainty and retreating US Treasury yields.

Investors are looking for safety with the US presidential election around the corner and recent polls showing a close race between the two candidates Vice President Kamala Harris and former President Donald Trump.

Beyond that, US Treasury yields pulled back after JOLTS Job Openings data declined by more than expected in September. The Federal Reserve (Fed) has set the labor market as the main focus of its monetary policy, and these figures have practically confirmed a 25 bps rate cut next week.

Daily digest market movers: Gold consolidates gains with investors pricing two more Fed rate cuts in 2024 

• US JOLTS Job openings declined to 7.44 million in September, and August’s reading was revised down to 7.86 million from the previously estimated 8.04 million. These figures have scratched the picture of a solid labour market ahead of Friday’s Nonfarm Payrolls (NFP) report.
• On the other hand, the Conference Board’s Consumer Confidence Index improved to 108.7 in October from 98.7 in September, beating expectations of a 99.5 reading.
• The CME Group’s Fed Watch tool shows a 99.6% chance of a quarter-point rate cut by the Fed next week, up from 92% on Tuesday. The chances of another 25 bps cut in December have increased to 76.6% from 72%.
• US 10-year Treasury yields retreated from three-month highs at 4.33% to 4.23% on Wednesday, which has provided an additional impulse to the precious metal.
• The main focus on Wednesday is the advanced US Gross Domestic Product (GDP) report, which is expected to show a healthy 3% annualized growth in Q3. The ADP Employment Change, however, is seen declining to 115K from 143K, which might increase doubts about Friday’s Nonfarm Payrolls (NFP) report.

FXStreet