Gold prices (XAU/USD) began the week on a softer note but remain within a multi-day range, staying close to the all-time high reached last Thursday. The ongoing conflict between Israel and Lebanon has intensified, heightening the risk of further geopolitical tensions in the Middle East. Additionally, the announcement that Japan’s newly appointed Prime Minister Shigeru Ishiba plans to hold a general election on October 27, coupled with political uncertainty in the United States, is expected to bolster demand for the safe-haven precious metal.
Furthermore, expectations of a dovish Federal Reserve continue to keep US Dollar (USD) bulls at bay, with the dollar trading near its lowest level since July 2023 as of Friday. This scenario may provide further support for gold prices. However, a risk-on sentiment, driven by new stimulus measures introduced by China over the weekend, has exerted some downward pressure on XAU/USD for the second consecutive day.
Despite these dynamics, the overall fundamental environment suggests that dip-buying opportunities may arise as investors seek refuge in gold amidst the prevailing uncertainties.
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