(Bloomberg) -- Gold retreated from an all-time high as some investors booked profits while assessing geopolitical risks from the US election and Middle East conflicts.
Bullion slipped as much as 1.5% in New York trading on Wednesday, with some traders exiting positions amid signs that the precious metal’s recent rally to successive highs may be excessive. The metal’s relative strength index has been above the overbought level of 70 for the past three sessions. A stronger dollar and rising bond yields also weighed on bullion.
Gold earlier climbed to a fresh record of $2,758.49 as geopolitical risks from the US presidential race and the Middle East boosted haven demand. Concerns are that the election in the world’s largest economy is likely to be contested and it may take some time to determine the winner. Investors also feared that conflicts between Israel and Iran may escalate into a broader war.
Standard Chartered Plc analyst Suki Cooper expects further upside risk in the coming weeks. The bank sees gold averaging $2,800 an ounce in the fourth quarter, with prices set to average $2,900 for the first three months of next year.
The precious metal has surged by more than 30% this year, hitting successive highs, with the rally intensifying in the last couple of months as the Fed pivoted to cutting interest rates. Money managers have also added to the strength of the increase, with hedge funds boosting net-long positions in gold in recent sessions and investors adding to exchange-traded fund holdings.
Spot gold was down 1.3% at $2,712.73 an ounce as of 11:28 a.m. in New York. The Bloomberg Dollar Spot Index rose. Silver, palladium and platinum slid.
--With assistance from William Clowes.
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