Gold price (XAU/USD) have been holding around $2,735, showing stability even after a recent dip. This resilience comes as the US presidential election sparks demand for safe-haven assets, with investors looking to protect themselves from market swings. In addition, geopolitical tensions in the Middle East continue to support gold as a reliable asset during uncertain times.
In recent weeks, factors such as the possible unwinding of the “Trump trade” and expectations that the Federal Reserve (Fed) may lower interest rates further have added pressure to US Treasury bond yields. With lower yields, the US Dollar (USD) weakens, indirectly supporting gold prices by making it more affordable for international buyers.
Factors Impacting Gold Price Stability
US Election Effect
As the US election impact, investors remain cautious, waiting for more clarity before making big moves. The election polls are close, which adds uncertainty and increases the appeal of assets like gold price. Rising geopolitical risks, especially involving Iran, add further pressure, making investors hesitant.
Tuesday’s release of the US ISM Services PMI will give insight into the economy, but many traders are focused on the election and the upcoming Federal Open Market Committee (FOMC) meeting.
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Technical Analysis and Key Gold Price Levels
From a technical standpoint, gold encountered resistance last week at the top of an ascending channel formed since late July. While the price pulled back from this peak, critical support is now set around $2,720 to $2,715, where the market may find stability. If gold falls below this level, it could test the $2,690 support zone, indicating a potential decline.
However, if gold price rise, they may face resistance between $2,748 and $2,750. Breaking past this level could allow for a rise toward $2,790, and continued strength might even push the price closer to the $2,820 mark.
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Market Sentiment: US Dollar and Treasury Yields
The recent decline in US Treasury yields has influenced gold’s performance. The 10-year and 2-year US Treasury yields dropped significantly, partly due to expectations for further Fed rate cuts, given the softer labor market. A lower yield environment weakens the USD, making gold an appealing alternative investment.
When the USD weakens, gold prices often rise as it becomes more affordable for international buyers, further supporting demand.
Conclusion
In a landscape shaped by political uncertainty and economic concerns, gold remains a popular safe-haven asset. As the US election nears and key events approach, traders are cautious about making bold moves. Gold prices are likely to be guided by the key support and resistance levels outlined above.
For ongoing insights into the gold market analysis, explore our updates at Daily Gold Signal.
