Gold price (XAU/USD) has surged past $2,750, reaching new all-time highs. The ongoing conflict in the Middle East and the uncertainty surrounding the upcoming US elections are the main reasons behind this rally. Investors are looking for safer investments like Gold due to these risks.
In the US, former President Donald Trump and Vice President Kamala Harris are very close in the polls. A potential Trump victory is seen as a concern for global stability, which is driving more interest in Gold.
Another factor supporting Gold is the BRICS group of countries (Brazil, Russia, India, China, and South Africa). During their 2024 summit, they have been discussing alternatives to the US Dollar, and a currency backed by Gold is one idea being considered.
At the same time, the rise in Gold is limited by global bond market trends. Interest rates are expected to drop more slowly than previously thought, especially in the US. The US Federal Reserve had planned to cut interest rates faster, but now it seems like those cuts will be slower. Higher interest rates and a strong US Dollar reduce the appeal of Gold, which doesn’t pay interest.
Gold Grows Due to Safe-Haven Demand Amid Conflict
As the Middle East conflict worsens, Gold continues to climb. Fighting between Israel, Hamas, and Hezbollah in Gaza and Lebanon has created uncertainty, making Gold a safer choice for investors.
Despite the death of Hamas leader Yahya Sinwar, no negotiations have started. US Secretary of State Antony Blinken, on his eleventh trip to the region, has not yet been able to secure a ceasefire. On Wednesday, Blinken had to take cover in a bunker in Tel Aviv as air-raid sirens sounded.
Israeli forces have started attacking the ancient city of Tyre in Lebanon, after telling residents to evacuate. More conflict may be ahead, as Israel prepares for a possible response to Iran after an Iranian drone exploded near Prime Minister Netanyahu’s home.
Technical Analysis: Gold Heads Towards $3,000
Gold has broken through the $2,750 mark and is now likely to aim for $3,000. The uptrend remains strong across all time frames, meaning prices could continue to rise.
However, Gold’s Relative Strength Index (RSI) shows it may be overbought, signaling a possible pullback. Traders are advised to be cautious and not add more to their long positions just yet. If the RSI drops to neutral levels, this could indicate that a correction is on the horizon.
Support for Gold is seen at $2,750, $2,700, and $2,685 (September high). Although a short-term drop is possible, the overall upward trend in Gold suggests any dips will be brief before prices continue climbing again.
Conclusion
Gold’s recent rally is driven by conflict in the Middle East and concerns about the US election. The BRICS group’s discussions about alternatives to the US Dollar also play a role. However, slow interest rate cuts and a strong US Dollar are limiting Gold’s growth.
For more information on Gold price movements and daily updates, check the Daily Gold Update. To receive daily trading signals and insights, visit the Daily Gold Signal.
