Gold price hovers near record high, bulls seem unaffected by elevated US bond yields

• Gold price regains positive traction following the overnight pullback from the all-time peak. 
• The US political uncertainty and Middle East tensions underpin the safe-haven XAU/USD.
• The easing monetary policy environment offsets rising US bond yields and remains supportive.

Gold price (XAU/USD) attracts some dip-buying during the Asian session on Tuesday and remains within the striking distance of a fresh record peak, around the $2,740-2,741 area touched the previous day. The uncertainty surrounding the US Presidential election on November 5, along with the risk of a broader Middle East conflict and the expected interest rate cuts by major central banks, continue to offer some support to the safe-haven precious metal.

Meanwhile, the US Dollar (USD) stands firm near its highest level since early August amid the recent surge in the US Treasury bond yields, bolstered by bets for a smaller interest rate cut by the Federal Reserve (Fed) in November. This, along with slightly overbought conditions on the daily chart, might hold back traders from placing fresh bullish bets around the Gold price and cap gains in the absence of any relevant market-moving US economic data.

Daily Digest Market Movers: Gold price continues to draw support from a combination of factors, despite bullish USD

• A projectile crossing from Lebanon fell in an open area in central Israel, while the latter warned of more attacks on Hezbollah after targeting the Iran-backed group's financial operations. 
• The European Central Bank last week lowered interest rates for the third time this year – marking the first back-to-back rate cut in 13 years – and eyes more cuts amid an economic downturn.
• Weak inflation data from the UK solidified bets for more aggressive rate cuts by the Bank of England and the Federal Reserve is also anticipated to lower borrowing costs further.
• Opinion polls indicate that Vice President Kamala Harris and former President Donald Trump remain locked in a close contest as the November 5 US Presidential election approaches. 
• Meanwhile, increasing concerns that Donald Trump's win could see the launch of further potentially inflation-generating tariffs triggered the overnight selloff in US government debt.
• Moreover, the markets have fully priced out the possibility of another jumbo interest rate cut by the Fed in November, lifting the US Treasury bond yields to nearly three-month highs.
• The US Dollar preserves its recent strong gains to the highest level since early August, albeit does little to dent the underlying strong bullish sentiment surrounding the Gold price.
• Traders now look to the release of the Richmond Manufacturing Index, which, along with Philadelphia Fed President Patrick Harker's speech, might provide some impetus to the XAU/USD. 

Technical Outlook: Gold price could pause near a short-term ascending trend-channel resistance near the $2,750 area

From a technical perspective, the recent move-up witnessed over the past two weeks or so has been along an ascending channel. This points to a well-established short-term uptrend and supports prospects for a move towards challenging the trend-channel resistance, currently pegged near the $2,750 region. That said, the Relative Strength Index (RSI) on daily/4-hour charts is flashing slightly overbought conditions and warrants some caution. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before traders start positioning for the next leg up.

Meanwhile, any corrective slide now seems to find some support near the $2,720 region. This is closely followed by the lower end of the aforementioned channel, currently pegged near the $2,710 area, which if broken decisively should pave the way for deeper losses. The subsequent fall could drag the Gold price below the $2,700 mark, towards the $2,685 support. The latter should act as a key pivotal point, below which the XAU/USD could accelerate the decline towards the $2,662-2,661 resistance breakpoint, now turned support.