The gold price remains above $2,750 in the early European session, with investors keeping an eye on crucial US economic data this week. This precious metal has been benefiting from safe-haven demand, driven by geopolitical tensions in the Middle East and uncertainty surrounding the upcoming US presidential election. Despite these factors, strong US Treasury yields and a firm US Dollar (USD) are restraining further gains.
Key Factors Influencing Gold Price Above $2,750
Persistent concerns over the Middle East situation, coupled with pre-election nerves, are attracting safe-haven investors to gold. These geopolitical factors are keeping gold’s price close to its all-time high set last week, as investors view the metal as a secure asset amid global unrest.
US Market Movements and Their Effect on Gold Price
On Monday, the gold price attracted some buyers around the $2,725 level, rebounding after a slight dip. This price action follows upbeat US economic indicators that reduce expectations for another aggressive rate cut. Additionally, the bond yield situation in the US may shift as concerns over national debt resurface in the lead-up to the November 5 election.
Meanwhile, China has reported an 11.18% decrease in gold consumption during the first nine months of 2024, largely due to high prices, which have dampened jewelry sales. This lower demand from China could exert downward pressure on gold prices if it continues.
Technical Analysis of Gold Price Movement
In technical terms, if the gold price consolidates above the $2,750 mark, it may attract more buyers, potentially pushing the price past the all-time high of $2,759 and testing the resistance around $2,770-2,775. Any further upward momentum could see the price touching the $2,800 level.
However, the Relative Strength Index (RSI) on the daily chart is close to overbought, suggesting a possible short-term pullback. Traders might prefer to wait for this consolidation before placing additional bullish positions.
Support Levels to Watch
In the event of a pullback, immediate support is located near the $2,725 level, followed by the $2,715 zone. If these levels are broken, gold may experience additional pressure, possibly falling towards the $2,675 area or even the $2,655 support level.
Upcoming US Economic Events Impacting Gold’s Price Outlook
Investors are keenly watching Tuesday’s US economic releases, including the Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS). The data could offer valuable insights into the Fed’s rate outlook, which would likely influence the USD and indirectly impact gold prices.
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