Gold price (XAU/USD) have pullback from a recent all-time high, hitting a daily low of $2,655. This drop is due to some investors taking profits, the market mood turning positive, and the gold market being slightly overbought. A small rise in the US Dollar (USD) also added pressure on gold prices. However, expectations of the Federal Reserve (Fed) cutting interest rates are likely to support gold by weakening the USD, which could prevent further drops.
Geopolitical and Economic Factors Support Gold Prices
Concerns over geopolitical tensions, particularly in the Middle East, and political uncertainty in the US ahead of the upcoming presidential elections are helping to limit gold’s decline. Investors are waiting for the Fed’s next move, especially with Fed Chair Jerome Powell’s speech coming up soon. The release of the US Personal Consumption Expenditure (PCE) Price Index on Friday is also important, as it could affect the USD and gold price pullback.
Factors Impacting Gold Price
Several factors are influencing the gold market right now:
- The Fed is expected to cut interest rates by 50 basis points in November, which would likely push gold higher.
- Weak US economic data has caused the USD to drop, giving gold prices a boost.
- US consumer confidence fell sharply in September, from 105.6 to 98.7.
- Geopolitical tensions have risen, especially after Israeli airstrikes in Lebanon, increasing gold’s safe-haven appeal.
- China’s new economic stimulus has supported the market, though gold’s bullish outlook remains strong.
Technical Analysis: Key Support Levels for Gold
Technically, gold remains strong after breaking out of a short-term channel. However, with gold now overbought, some profit-taking or a pullback might occur. Any dip is expected to attract buyers, with strong support at $2,625, followed by $2,600 and $2,575. These levels will be key for future price movements.
Conclusion
While gold has pulled back from its peak, several factors are likely to support prices and prevent a major decline. Investors are closely watching geopolitical events and upcoming economic data for further direction. For more updates on gold prices, visit Daily Gold Update. To explore gold trading strategies, check out Daily Gold Signal.
