Macro Risks and U.S. Election Uncertainty Continue to Support Gold

Gold prices continue to explore peaks this week as they approach $2,800 per ounce. While gold has slightly retreated during European trading hours, it maintains its trajectory near peak levels.

According to ANZ Research analysts, investors are continuing their interest in gold amid the current economic environment characterized by increasing macro risks. Market conditions appear to be shaped by high levels of uncertainty ahead of the U.S. elections. Furthermore, data from the World Gold Council indicates that demand for the precious metal is particularly supported by investors seeking a safe haven, with this demand showing a 5% increase in the third quarter.

Investors are now focusing on the U.S. employment statistics set to be released on Friday, as well as today's personal consumption expenditures price index data preferred by the Fed. Gold futures are trading at around $2,775, reflecting a 0.4% decline influenced by market movements.

In light of employment and inflation data, the Fed's interest rate policy is being closely monitored. Market participants are seeking a clear approach from the Fed regarding interest rates amidst election uncertainties and U.S. inflation reports. The Core Personal Consumption Expenditures (PCE) index is expected to rise by 0.3% in September. Analysts predict that if the increase in the PCE index remains limited, gold prices may gain upward momentum.

City Index senior analyst Matt Simpson notes that despite price fluctuations, investors continue to prefer gold. Simpson adds that a lower-than-expected inflation figure could further enhance gold's appeal.

Weekly jobless claims and the non-farm payroll report will also provide additional insights into the economy and the strength of the labor market. The Federal Reserve's low interest rate environment continues to be a strategic factor in gold's rise, as bullion tends to be more favored by investors when interest rates are low.