Gold prices have continued their upward trend as investors anticipate the potential effects of the upcoming U.S. elections. As uncertainties grow, gold remains a preferred safe haven for many. According to OCBC FX analysts Frances Cheung and Christopher Wong, market activity reflects these rising concerns, pushing gold prices higher as investors seek protection from election-related risks.
Gold Prices Approach $2800 Resistance Level as Election Uncertainty Grows
As the November election approaches, a potential victory for the current administration, represented by the “Trump-over-Harris” sentiment in decentralized betting markets, has fueled further market fluctuations. This outlook has renewed discussions around issues like U.S. debt, inflation, and dedollarization, factors that typically increase demand for gold.
According to analysis, a proposed tax cut from the Trump administration could increase the national debt by $7.5 trillion, further encouraging investors to hedge with assets like gold. Defensive strategies, including long positions in gold, have gained traction as investors prepare for possible election impacts and geopolitical shifts.
How U.S. Election Risks Could Impact the Gold Market
The election’s outcome may bring varying impacts to asset classes, especially in precious metals. A victory for Trump could rekindle U.S.-China trade tensions, likely adding more uncertainty and fueling further demand for gold as a safe haven. On the other hand, a win for Harris could ease market volatility, potentially giving gold prices a momentary breather after a significant rally of nearly 35% this year. Analysts have identified $2800 as the next resistance level for gold, while support levels are set at $2720 and $2690 (21 DMA).
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