Gold (XAU/USD) has seen a modest recovery, trading around $2,740 on Monday, driven by a weakening US Dollar (USD). As a dollar-denominated asset, gold benefits from a weaker greenback. Additionally, ongoing geopolitical tensions, particularly the potential for further conflict between Iran and Israel, are bolstering safe-haven demand for gold.
The recent decline in odds for a Donald Trump victory in the US presidential election has also played a role. A potential Trump win was previously seen as supportive of higher interest rates, which would negatively impact gold. However, as these odds have diminished, the market is pricing in a potential rate cut by the Federal Reserve, making gold more attractive.
Technical analysis suggests that gold remains in an overall uptrend, despite the recent pullback. A break above the all-time high of $2,790 could lead to further gains, with potential resistance levels at $2,800 and $2,850. On the downside, support is seen at $2,709.