Gold prices (XAU/USD) are experiencing some dip-buying after a decline to over a week’s low on Tuesday, currently trading around the $2,735 mark, showing little change for the day as the European session approaches.

The precious metal is receiving support from safe-haven demand driven by the tightly contested US presidential election and the potential for increased geopolitical tensions in the Middle East.

At the same time, the unwinding of the "Trump trade" and expectations that the Federal Reserve (Fed) will continue to cut interest rates amid signs of a softening US labor market are pushing US Treasury bond yields lower across the board.

This trend is preventing the US Dollar (USD) from gaining traction after its recent bounce from a two-week low, further supporting gold prices.

Technical Outlook:

The recent performance of gold prices suggests vulnerability following last week's rejection near the upper boundary of an ascending channel formed since late July, indicating potential bullish exhaustion.

 However, mixed indicators on the daily chart advise caution before anticipating further losses. If the price declines further, support is likely to be found around the $2,720-2,715 horizontal area.

A drop below this level could lead to a test of trend-channel support near the $2,690 mark. Continued selling pressure could signal a bearish breakdown, resulting in a more significant corrective decline in the near future.

Conversely, the $2,748-2,750 region appears to be an immediate resistance level, followed by the $2,790 area, which corresponds to last Thursday's record high. Beyond that, the next resistance level is around $2,800, with ascending channel resistance located near the $2,820 zone.

Sustained strength past this level would serve as a fresh signal for bullish traders, potentially allowing gold prices to continue their well-established upward trend.

Paraphrasing text from "FXSTREET" all rights reserved by the original author.