• Gold price attracts some haven flows amid the risk-off mood and Middle East tensions.
• A modest USD downtick further benefits the XUA/USD, though the upside seems limited.
• Bets for smaller rate cuts by the Fed should limit the USD losses and cap the yellow metal.

Gold price (XAU/USD) edges higher for the second straight day on Wednesday – also marking the fourth day of a positive move in the previous five – and touches a one-and-half-week high, around the $2,670 region during the Asian session. Retreating US Treasury bond yields drags the US Dollar (USD) away from over a two-month peak touched earlier this week and turns out to be a key factor underpinning the commodity. Furthermore, a turnaround in the global risk sentiment – as depicted by a weaker tone across the global equity markets – drives some haven flows towards the precious metal amid persistent geopolitical risks. 

Adding to this, elevated demand from central banks offers additional support to the Gold price. That said, firming expectations for a less aggressive policy easing by the Federal Reserve (Fed) and bets for a regular 25 basis points (bps) rate cut in November should limit any meaningful USD corrective decline. This, in turn, might hold back bulls from placing fresh bets around the non-yielding yellow metal. Moreover, reports that Israel will refrain from targeting Iran's oil and nuclear sites might contribute to capping gains for the XAU/USD, warranting some caution before positioning for any further near-term appreciating move.