Gold Price Moves Back Above $2,750 Level, Closer To All-Time Peak -

Gold Price Moves Back Above $2,750 Level, Closer To All-Time Peak

Oct 28, 2024Jeremy ParkinsonFinance0

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Gold price catches fresh bids on Tuesday amid Middle East tensions and US election jitters.

Bets for smaller Fed rate cuts remain supportive of elevated US bond yields and the USD.

A positive risk tone might further contribute to capping the XAU/USD ahead of US data.

Gold price (XAU/USD) ticks higher during the Asian session on Tuesday and moves closer to the top end of a short-term trading range held over the past week or so. Against the backdrop of safe-haven demand stemming from Middle East tensions and US election jitters, subdued US Dollar (USD) price action is seen as a key factor offering support to the commodity. However, bets for a less aggressive policy easing by the Federal Reserve (Fed) continue to act as a tailwind for the buck and hold back bullish traders from placing fresh bets around the non-yielding yellow metal.Apart from this, the underlying bullish tone across the global equity markets contributes to capping the upside for the Gold price. Investors also seem reluctant and prefer to move to the sidelines ahead of this week’s important macro releases from the US – the Advance Q3 GDP print, the Personal Consumption Expenditures (PCE) Price Index and the Nonfarm Payrolls (NFP) report. The crucial data will play a key role in influencing market expectations about the Fed’s rate-cut path, which, in turn, will drive the USD demand and provide a fresh directional impetus to the XAU/USD.

Daily Digest Market Movers: Gold price continues to attract haven flows amid geopolitical risks and US political uncertainty

Retreating US Treasury bond yields triggered an intraday US Dollar pullback from its highest level since July 30 and assisted the Gold price in attracting some dip-buyers near the $2,725 region at the start of an eventful week.

The recent upbeat US macro data dampened hopes for another jumbo rate cut by the Federal Reserve, which should act as a tailwind for the US bond yields amid deficit-spending concerns after the November 5 US election.

With the US presidential election approaching, Vice President Kamala Harris and the Republican nominee Donald Trump are caught in a knife-edge battle to the White House, adding a layer of uncertainty in the markets.

The US warned Iran at the United Nations Security Council of severe consequences if it undertakes any further aggressive acts against Israel in retaliation to the latter’s strikes on military targets across Iran over the weekend.

China’s gold consumption in the first three quarters of 2024 slid 11.18% from the same period a year ago as high prices dented buying interest for jewelry products, the state-backed gold association said on Monday.

Investors now look to Tuesday’s US economic docket – featuring the release of the Conference Board’s Consumer Confidence Index and Job Openings and Labor Turnover Survey (JOLTS) – for short-term opportunities.

This, along with a string of US economic data due this week, should provide cues about the Fed’s interest rate outlook, which will influence the USD price dynamics and provide a fresh directional impetus to the XAU/USD.

Technical Outlook: Gold price could aim to challenge a multi-month-old ascending trend-line hurdle near the $2,770-2,775 area
From a technical perspective, acceptance above the $2,750 supply zone could be seen as a fresh trigger for bullish traders. The subsequent move up could lift the Gold price beyond the all-time peak, around the $2,759 region, towards testing a nearly four-month-old ascending trend-line resistance near the $2,770-2,775 region. The momentum could extend further towards the $2,800 round-figure mark.That said, the Relative Strength Index (RSI) on the daily chart is on the verge of breaking into the overbought territory and warrants some caution for bulls. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further near-term appreciating move. Meanwhile, any corrective pullback now seems to find some support near the overnight swing low, around the $2,725 region, ahead of the $2,715 zone. The latter marks the lower boundary of the one-week-old range, which if broken decisively might prompt some technical selling. The Gold price might then weaken further below the $2,700 mark, towards the $2,675 area en route to the $2,657-2,655 horizontal support.More By This Author:EUR/JPY Tests The Previous High At 164.90 After Rejection At 166.00 USD/JPY Gives Away Post-Election Gains And Returns To 152.50 EUR/GBP Jumps Closer To Mid-0.8300s, Upside Potential Seems Limited