Gold prices rebound slightly after 11 week low

Gold prices edged higher following their steepest one day drop in 11 weeks, pressured by rising U.S. Treasury yields.

After retreating from an all-time high on Wednesday, gold was trading around $2,720 per ounce, ending the session 1.2% lower. The pullback coincided with technical indicators suggesting the recent rally may have been overextended, with the 14 day Relative Strength Index (RSI) signaling the metal was in overbought territory.

The downward momentum persisted as U.S. bonds posted further losses, amid expectations that the Federal Reserve would adopt a cautious stance in easing monetary policy. Higher yields and increased borrowing costs typically weigh on gold, as it offers no yield or interest.

Earlier on Wednesday, gold surged to a record-breaking $2,758.49 per ounce, fueled by uncertainty surrounding the U.S. presidential race and heightened geopolitical tensions in the Middle East, which spurred demand for safe haven assets.

There is growing concern that the U.S. elections, in the world's largest economy, could be disputed, potentially delaying the outcome. Investors are also worried about the risk of a wider conflict in the Middle East, as tensions between Israel and Iran escalate.

Gold has surged more than 30% this year, setting consecutive records, with the rally intensifying over the past two months as the Federal Reserve shifted to cutting interest rates. Hedge funds have further fueled the upward trend, increasing their net long positions in gold, while investors continued to expand their holdings in exchange-traded funds (ETFs).

As of 7:41 a.m. in Singapore, spot gold rose 0.2% to $2,720.63 per ounce.