Gold (XAU) Daily Forecast: Double Top Halts XAU Near $2,757 as Fed & Election Keep Markets Edgy

Market Overview

During the Asian session on Tuesday, gold prices (XAU/USD) saw a robust upward trend, reaching approximately $2,758 per ounce.

Investors flocked to gold as a safe-haven asset due to heightened geopolitical tensions and growing uncertainty surrounding the upcoming U.S. elections.

Declining U.S. Treasury yields have pressured the dollar, amplifying gold’s appeal. Meanwhile, expectations that the Federal Reserve may adopt a cautious approach in easing policies after the election have further boosted demand.

Gold’s upward movement has also been influenced by declining U.S. Treasury bond yields, which weakened the dollar, and recent Fed indications that rate cuts may not be as aggressive as initially anticipated.

Concerns that increased government spending post-election could drive inflation higher have capped bond yield declines, further bolstering gold’s value as a hedge against economic uncertainty.

U.S. Dollar Weakens as Investors Anticipate Key Economic Data

The dollar’s recent dip has provided additional support for gold, particularly as Treasury yields hover at lower levels. Investors await U.S. economic data later in the week, including third-quarter GDP, the Personal Consumption Expenditures (PCE) Price Index, and Nonfarm Payrolls (NFP) data, which will provide insights into the Federal Reserve’s likely policy path.

Key indicators, such as the Consumer Confidence Index and Job Openings and Labor Turnover Survey (JOLTS), are also expected to influence the market, shaping the outlook for U.S. interest rates.

Geopolitical Tensions and U.S. Election Add to Gold’s Appeal

Political uncertainty surrounding the U.S. presidential election is further driving safe-haven flows into gold. The race between Vice President Kamala Harris and Republican nominee Donald Trump remains close, and investors are wary of potential economic shifts post-election.

Rising tensions in the Middle East have also contributed to the upward pressure on gold, as concerns mount over possible retaliatory actions in the region.

In China, demand for gold has declined, with jewelry consumption down 11.18% in 2024’s first three quarters due to elevated prices, showing how high prices affect demand.

Yet, global safe-haven demand remains strong as investors brace for both economic and geopolitical shifts ahead.

Short-Term Forecast

Gold’s price is poised near $2,757 resistance. A breakout here could trigger further gains, while a drop below $2,739 might signal near-term bearish pressure.

Gold Prices Forecast: Technical Analysis

Gold is currently trading at $2,749, and the price is flirting with the pivot point at $2,747.77. Key resistance levels stand at $2,757.81 and $2,766.51, with a notable double-top pattern around $2,757 acting as a tough barrier for further upside.

If the price breaks through this level, we could see a bullish momentum kick in. However, if gold slips below the immediate support at $2,739.77, it may drop toward the next supports at $2,728.21 and $2,722.44.

With the 50-day EMA at $2,740.03 and 200-day EMA at $2,720.10, gold’s near-term trend remains cautious. A move above $2,757 would indicate stronger bullish sentiment.