Gold steadies on Tuesday, having reached a new five-day low earlier in the day as the US presidential election remains a question-mark event.
The election could be polarizing for the US Dollar, impacting Gold, or even be a “win-win” for the precious metal.
Technically, there are signs XAU/USD is entering a short-term downtrend.
Gold (XAU/USD) continues to backslide from its record high, eventually finding support at $2,724 early on Tuesday and bouncing back to regain the $2,740s. A marginally weaker US Dollar (USD) due to uncertainty over the US presidential election result is aiding Gold in its rebound, since the precious metal is mostly priced and traded in USD.
This comes as markets increasingly view the final result of the election as polarizing for the US currency, with a victory for Republican nominee Donald Trump USD-bullish but the opposite for Democrat nominee Kamala Harris.
Simmering tensions in the Middle East also keep Gold supported, after Iran's supreme leader, Ayatollah Ali Khamenei, said that the US and Israel "will definitely receive a crushing response," to Israel’s attack last month. Further, overweight long-positioning from trend-following hedge funds is also helping the yellow metal sustain its current highs.
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