Gold futures were falling 0.3% to $2,740.40 a troy ounce. The precious metal had peaked at $2,772.60 an ounce on Wednesday, followed by a sharp sell-off.
This price action reflects a tug-of-war between profit-taking short-term investors, and persistent demand from investors committed to buying gold on dips, said Pepperstone’s Ahmad Assiri.
The recent dip is likely to be a temporary price-consolidation phase, and partially reflects rising bond yields, Assiri said in a note. But the pullback in prices has also proven gold’s ability to attract fresh investment demand. The upcoming U.S. election continues to loom over markets, stoking fresh uncertainties. Geopolitical tensions are also bubbling, keeping the longer-term outlook for safe-haven assets like gold positive, Assiri said.