Gold price bulls remain on the sidelines, around $2,740 after early US election results

• Gold price edges lower on Wednesday in reaction to the initial US election exit polls.
• Improving the odds of a Trump victory boosts the USD and weighs on the XAU/USD.
• A sharp rise in the US bond yields further undermine the non-yielding yellow metal.

Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from the $2,725-2,724 area, or a one-and-half-week low and attracts fresh sellers during the Asian session on Wednesday. The commodity currently trades around the $2,740 level and is weighed down by a strong pickup in the US Dollar (USD) demand.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, spikes to a one-week high after initial exit polls indicated an early lead in key swing states for the Republican nominee Donald Trump. Moreover, speculations about the launch of Trump's potentially inflation-generating tariffs, along with deficit-spending concerns, triggered a sharp rise in the US Treasury bond yields. This turns out to be another factor underpinning the Greenback and exerting some pressure on the non-yielding Gold price. 

As polls continue to hit the wires, expectations of volatile swings across the global financial markets offer some support to the safe-haven XAU/USD and help limit the downside. Hence, it will be prudent to wait for strong follow-through selling before traders start positioning for an extension of the precious metal's recent pullback from the vicinity of the $2,800 mark, or the record high touched last Thursday.