Gold price remains below $2,750 as USD and bond yields surge on Trump enthusiasm

• Gold price ticks lower on Wednesday as the USD surges to a four-month high.
• The Trump trade is back in play following the initial US election exit poll results. 
• Expectations for a spike in volatility lend support to the safe-haven XAU/USD.

Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from the $2,725-2,724 area, or a one-and-a-half week low and seesaws between tepid gains/minor losses during the Asian session on Wednesday. A strong pickup in the US Dollar (USD) demand, bolstered by exit polls indicating a lead for the Republican nominee Donald Trump in key swing states – acts as a headwind for the commodity. 

Apart from this, a sharp intraday surge in the US Treasury bond yields and the risk-on impulse turn out to be another factor keeping a lid on the non-yielding Gold price. That said, expectations for a further spike in volatility in the wake of the US election results hold back traders from placing aggressive bearish bets around the safe-haven precious metal, which, in turn, should help limit any meaningful downfall. 

Daily Digest Market Movers: Gold price bulls remain on the sidelines amid resurgent USD demand

• The US Dollar surged to a nearly four-month top in reaction to the US election exit polls, which suggest that the vote is moving in former President Donald Trump's direction.
• Georgia, a key swing state, was among the first of those with available exit polls, showing a Trump victory, and early exit poll results in Wisconsin also point to a Trump win.
• Preliminary results of the exit poll from Pennsylvania, one of the most closely watched swing states, appear in favor of Vice President Kamala Harris, according to CBC News.
• North Carolina exit polls show a close race while Nebraska District 2 initial results show Harris leading. CBC News called Indiana, Kentucky and West Virginia for Trump.
• Rising odds of Trump winning the election fuel speculation about the launch of potentially inflation-generating tariffs and push the US Treasury bond yields sharply higher. 
• The US election results clear out a major point of uncertainty for markets, triggering a fresh wave of risk-on trade and further contributing to capping the safe-haven Gold price.
• The downside for the XAU/USD, however, is cushioned as traders remain cautious in the wake of the expected spike in volatility across the global financial markets.
• Iran's plans for a retaliatory strike against Israel’s attack on its territory on October 26 continue to fuel worries about the risk of a further escalation of tensions in the Middle East.

Technical Outlook: Gold price traders await a breakout through a multi-day-old trading range

From a technical perspective, the $2,725-2,720 area might continue to act as immediate strong support, below which the Gold price could accelerate the slide towards testing sub-$2,700 levels. The latter represents the lower boundary of a short-term ascending trend channel extending from late July. A convincing break below should pave the way for an extension of the recent corrective pullback from the all-time peak touched last week and drag the XAU/USD toward the next relevant support near the $2,675 zone en route to the $2,657-2,655 region.

On the flip side, the $2,748-2,750 area now seems to have emerged as an immediate hurdle. The subsequent move up could lift the Gold price to the ascending trend-channel hurdle, currently pegged near the $2,780-2,785 region. This is closely followed by the $2,800 mark, which is likely to act as a key pivotal point. A sustained strength beyond will set the stage for the resumption of the prior well-established uptrend.