Gold Price Forecast: XAU/USD jumps above $2,400 amid a risk-averse environment

• Gold price holds positive ground near $2,410 in Monday’s early Asian session. 
• High uncertainty surrounding the US Presidential election tends to be good for gold, a safe-haven asset. 
• The first reading of US PMI, Q2 GDP, and June PCE data will influence the yellow metal this week. 

Gold price (XAU/USD) attracts some buyers around $2,410, snapping the three-day losing streak during the early Asian session on Monday. The yellow metal edges higher amid the political uncertainty in the United States after the report that US President Joe Biden dropped out of the US presidential race.

On Sunday, US President Joe Biden announced that he will end his reelection bid and will speak to the nation later this week in more detail about his decision. Several experts argued that Biden’s ending of his reelection campaign would increase market volatility. “With uncertainty about who the candidate will be, investors will seek a safe haven until they can assess whether or not the replacement for Biden will continue or break from the high (and possibly higher) tax, more regulation, and more government intervention policies of the Biden administration,” said Peter Earle, senior economist at the American Institute for Economic Research. 

Additionally, the worrisome headline in China, the world’s second-largest economy, lifts the precious metal. China's $715 billion hedge fund industry is facing renewed pressure from stricter regulations coming into effect next month, pushing some investment companies to seek additional funding from white knights or even shut shop, according to Reuters. New guidelines for the fragmented industry from August 1 will impose higher asset thresholds for funds to operate, as well as tough investing and marketing rules. 

On the other hand, the dovish comments from the Federal Reserve (Fed) policymakers and the increased likelihood of Fed rate cuts in September failed to boost the non-yielding Gold price on Friday. The International Monetary Fund (IMF) said last week that the Fed should not cut interest rates until late 2024. Investors will monitor the US economic data this week. The preliminary US S&P Global PMI and Gross Domestic Product (GDP) for Q2, along with the Personal Consumption Expenditures - Price Index (PCE), will be in the spotlight this week. The stronger-than-expected readings could dampen the hope for a Fed rate cut this year and cap the upside for the Gold price.