Gold Prices Reach Record High of $2,750: What’s Driving the Rally?
Gold has gone up 6 days in a row and hit a new high of $2,750 an ounce as geopolitical tensions and global uncertainty combine. Investors are piling into gold as a safe haven as U.S. election and Middle East conflicts loom. It’s going to stay hot for the next few weeks.
Gold prices rose on Tuesday and hovered near a record high hit in the previous session amid uncertainties around the U.S. election, ongoing Middle East tensions, and expectations of central banks' interest rate cuts.
Spot gold rose 0.4% to $2,729.91 per ounce by 0303 GMT. U.S.… pic.twitter.com/RKvfDN8hlv
— Jeff George ™ (@jhon_odey) October 22, 2024
Central Banks and Rate Cuts
With central banks (including the Fed) about to cut rates, gold is looking good as a hedge against market volatility. U.S. Treasury yields just went up 62 basis points to 4.20% and the Fed is expected to cut rates but smaller than before. That might slow down gold’s move as a strong dollar could cap gains (since gold and the dollar are inverse). But global rate cuts are still supportive of gold and people are looking for safety in uncertain times.
Geopolitical Risks
Gold’s move is also driven by geopolitical factors, U.S. election and Middle East tensions. The possibility of a Trump administration return has added uncertainty to global markets (trade and immigration policy). Israel and Iran tensions are getting worse and the recent missile raid has increased demand for safe-haven assets like gold.
Geopolitical unease is driving demand for precious metals and gold is a hedge against political instability and war.
Gold hovers near record high on safe-haven demand
Gold prices rose on Tuesday and hovered near a record high hit in the previous session amid uncertainties around the U.S. election, ongoing Middle East tensions, and expectations of central banks' interest rate cuts. pic.twitter.com/YO9x60aF8Z
— Chris Wealth Management Pvt Ltd (@chriswealthman1) October 22, 2024
Technical Outlook for Gold
On the technicals, gold is in an ascending channel and support and resistance levels are key. Support at $2,739 and resistance at $2,753 if the trend continues.
50 day EMA at $2,720 is additional support and the RSI is at 68, overbought in the short term.
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