Gold opened slightly higher on Monday, attempting to rebound from a three-day corrective decline following an all-time peak last week.
The metal benefited from a weaker dollar in response to US President Joe Biden’s decision to withdraw from the 2024 presidential race.
This move clears the way for Kamala Harris to challenge Donald Trump, prompting investors to view bullion as a hedge against an uncertain political and market outlook. The prospect of rate cuts and ongoing political uncertainty in the United States are providing support for gold prices, setting up conditions for a potential rebound in the coming days.
This week, the gold market could face further volatility as investors anticipate several important economic indicators, including the US Personal Consumption Expenditures (PCE) figure on Friday, July flash PMIs, advance second-quarter GDP, and weekly jobless claims. Additional support for gold may also come from the slowing Chinese economy, as evidenced by the People’s Bank of China’s (PBOC) interest rate cuts.
The situation in the Middle East also supports gold prices appreciation, as ongoing geopolitical tensions, including recent escalations raising the risk of a broader conflict.
