Gold Defies Dollar's Rise, Soars to Record Highs Amid Market Tensions

Gold prices surged to new record highs despite a strong dollar, as investors face market uncertainties ahead of the U.S. election. Global stocks dipped with concerns about the Federal Reserve's interest rate decisions. The dollar gained strength, impacting currencies like the yen and euro.

Gold prices soared to a record high on Wednesday, defying the dollar's strength that pressured both yen and euro markets. Global stocks experienced declines as investors hesitated to make big bets with the upcoming U.S. election just weeks away.

Federal Reserve rate cut expectations have shifted, with predictions now leaning towards a half-point reduction rather than the previously anticipated full percentage point. This shift has impacted U.S. Treasuries, elevating yields to three-month highs and bolstering the dollar against other major currencies, prompting Japanese officials to voice concerns.

Despite these pressures, the stock market remains close to record highs. Investors are refocusing on economic positives and corporate earnings, while political developments, such as Trump's growing re-election odds, contribute to rising inflation expectations. Increasing Middle East tensions further support risk-averse movements into gold assets.

(With inputs from agencies.)