Gold prices have bounced back after experiencing their largest weekly decline since 2021. The metal has risen by up to 0.7% and is now trading above $2,581 per ounce.

This recovery comes after a loss of over 4% last week, which was driven by fluctuations in the US dollar and changing expectations regarding Federal Reserve interest rate cuts due to political developments.

Traders are closely watching the implications of Donald Trump's potential return to the White House next year, which has introduced uncertainty into the outlook for rate reductions. Despite concerns that his policies could lead to increased inflation, approximately 46% of traders anticipate a possible rate cut next month, prior to Trump's inauguration. Lower borrowing costs typically support gold prices, as the asset does not yield interest.