Gold Retraces from All-Time High Amid U.S. Election Uncertainty, Eyes $3,000

The US presidential election uncertainty has been the main driver of gold’s recent move. A Reuters/Ipsos poll has Democratic VP Kamala Harris leading Trump 46-43.

This close race has got the markets nervous and investors are seeking gold as a safe haven. Central banks are also still easing which is providing further support to gold as lower interest rates means there’s less opportunity cost of holding non-yielding assets like bullion.

🟡 Gold prices are surging due to rising geopolitical risks and U.S. election uncertainties. Historically, gold and the dollar move inversely, but both are up amid market caution.

Key factors:
1️⃣ Geopolitical tensions (Middle East, Ukraine)
2️⃣ U.S. election uncertainty (Trump’s… pic.twitter.com/l5OpxJsHu6

— Zeuspace (@Zeuspacehk) October 24, 2024

Peter A. Grant, Vice President and Senior Metals Strategist at Zaner Metals, said, “Geopolitical tensions and election uncertainty are the drivers of this move. If the Middle East situation gets worse we could see $3,000 by early 2024”

Monetary Easing Powers Gold

Central banks around the world are still easing and that’s powering the gold rally. Central banks including the Fed are keeping rates low to stimulate growth with inflation concerns and that’s making gold more attractive as an investment.

BNP Paribas analysts said the narrowing of the Democratic and Republican candidates has added to the uncertainty of the outcome and that’s supporting the gold rally.

Gold’s technicals are also pointing up. The RSI for gold is 74 which is overbought but the bigger picture is still bullish. With the US election just two weeks away political uncertainty and global tensions will keep gold prices high in the short term.

Silver also rose, up 2.8% to $34.72 an ounce, its highest since 2012. Han Tan, Chief Market Analyst at Exinity Group said, “We expect silver to break $35 before November 5th as long as the current gold and silver market trends continue.”

$XAUUSD ➡️#Gold prices fell over 1% after hitting a record high on Wednesday, as a stronger #dollar and a rise in U.S. #Treasury yields countered support from safe-haven demand linked to the Nov. 5 U.S. #election and Middle East war. The 10-day moving average defending $2700,… pic.twitter.com/m7J2Kqip1h

— ATFX (@Atfxglobal) October 24, 2024

Gold Price Forecast: Technical Ooutlook

Gold (XAU/USD) fell back after breaking the trend line and fell to $2,708 but has since bounced back to $2,727.12. Key levels are $2,734, $2,739.67 and $2,748.31 on the upside and $2,720.97, $2,709.30 and $2,701.97 on the downside.

The RSI is 47.78 which is neutral to slightly bearish. The 50 day EMA is at $2,722 so gold may consolidate short term. But a break above $2,735 could confirm the upside momentum and set up for more upside.

Since gold is oversold we are watching the $2,735 level. If it breaks through that it could set up for a bigger bullish trend and $2,748 and up.

Key Points:

• Gold Soars on Political and Geopolitical Tensions: Gold hits record highs as US election uncertainty and Middle East tensions drive safe haven demand.

• Monetary Easing Powers Gold: Lower rates and central bank policies make gold more attractive.

• Technical Outlook: Gold may hit $2,735 and then more up.

Gold will keep going up. Political uncertainty, monetary easing and global tensions. Watch the levels.󠁧󠁢󠁳󠁣󠁴󠁿