Gold Price Forecast: XAU/USD drifts lower below $2,700 on firmer US Dollar

• Gold price loses ground to around $2,680 in Monday’s early Asian session. 
• The strength of the USD undermines the yellow metal. 
• The uncertainty surrounding global economic uncertainty, geopolitical risks might boost safe-haven flows, benefiting the Gold price. 

Gold price (XAU/USD) trades in negative territory near $2,680 during the early Asian session on Monday. The downtick of the precious metal is pressured by a stronger US Dollar (USD) due to Donald Trump's victory. 

Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, extends its upside to around 105.00, the four-month high. 
 
Trump's victory has fuelled questions about whether the US Federal Reserve (Fed) may proceed to cut rates at a slower and smaller pace. This, in turn, boosts the Greenback and weighs on the USD-denominated Gold price. 

“This rally in the dollar and yields has put pressure on gold, which traditionally falls as real interest rates rise, reflecting reduced demand for safe-haven assets in the short term,” noted Matthew Jones, precious metals analyst at London-based metals trader Solomon Global. “However, from a longer-term, macro perspective, the future is ‘as good as gold,” added Jones. 

The upbeat US economic data on Friday contributes to the USD’s upside. The US Consumer Sentiment Index rose to 73.0 in November from 70.5 in October, according to the preliminary reading by the University of Michigan. This figure came in better than the market expectation of 71.0.

On the other hand, the global economic uncertainty and the ongoing geopolitical tensions in the Middle East might help limit the yellow metal’s losses. Israeli army Chief of Staff Herzi Halevi approved the expansion of the ground invasion of southern Lebanon, state broadcaster Kan reports.