The timing and pace of the Federal Reserve’s rate cuts is a long-term driver for Gold. Currently, the FOMC needs more confidence that inflation is returning to 2% before considering cuts. We believe the cuts will commence from July this year. Markets are pricing-in cuts starting from H2 2024. That said, the push back in market expectations from March to June may cap the price rally. 

A change in the governing party in the US would present risks around the future of policies. Amid these economic and geopolitical tensions, equity markets are hitting record high. This could potentially make investors more wary about the downside risk than upside potential. Volatility is expected to pick up as we get closer to the US elections. A risk-off scenario in equity markets will lend support to Gold prices.