Gold Supported Ahead of Mid-term Elections – Quick Daily Outlook
After fighting near the immediate hurdle of $1,680.00, the gold price (XAU/USD) was briefly corrected in the Tokyo session. The precious metal’s XAU/USD upside is limited by investor nervousness ahead of the midterm elections, while the downside is supported by global market confidence.
After touching Monday’s low of about 110.00, the US dollar index (DXY) has tried a rebound. Meanwhile, 10-year US Treasury rates have risen to roughly 4.23% and are projected to grow further ahead of US Consumer Price Index (CPI) data.
According to preliminary estimates, the headline CPI is expected to fall by 8.0% from 8.2% in the previous publication. In contrast, the core CPI, which includes oil and food prices, is expected to fall to 6.5% from 6.6% in the previous edition. The core inflation data has not yet shown promising signs of fatigue; therefore, the level of departure in the catalyst will be closely monitored.
But, first and foremost, elections for 435 House of Representatives seats and 34 Senate seats will be held. A Republican majority might cause political instability in the US economy and impact gold prices.
Gold Technical Outlook
The gold price resumes its bearish trading approach after getting rejected at the $1,683 level. On the lower side, gold’s immediate support stays at the $1,670 level, and a bearish breakout below this level could extend the selling trend until $1,660.
A further bearish breakout of this level can trigger another drop until $1,640 or $1,632 level while resistance continues to stay near $1,683 or $1,701 level.
Today’s trading range is likely to be between $1,655 at support and $1,700 at resistance.
Today’s projected trend: Bearish
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