Gold price recovers early lost ground amid US election concerns
Today, the price of gold (XAU/USD) is trading at $2,735 and is almost stable for the day after recovering a significant portion of its losses from the Asian session to a low of more than one week. The demand for safe haven assets resulting from the fiercely disputed US presidential election and the possibility of a further escalation of Middle Eastern geopolitical tensions continues to provide some support for the precious metal.
In the meantime, US Treasury bond yields continue to drop as a result of the "Trump trade" being unwound and speculation that the Fed would further cut interest rates in the face of a weakening labor market. This helps to limit the downside for the non-yielding gold price and does not help the US Dollar (USD) build on the overnight recovery from a two-week low.
Technical Outlook:
Technically speaking, the pullback from the all-time high and the failure last week close to the upper boundary of an ascending channel that began in late July could be interpreted as an indication of bullish exhaustion. As a result, any more decrease is more likely to encounter some support in the $2,720–2,715 horizontal zone. Below this, the price of gold may attempt to test the trend-channel support, which is presently situated close to the psychological level in the $2,700 area.
On the other hand, the $2,745-2,750 range currently appears to be an impending barrier before the $2,790 range or the record high that was reached last Thursday. The psychological level at $2,800 and the rising channel resistance, which is located in the $2,815 zone, come next. The gold price can continue its recent, well-established rise if it maintains strength above the latter, which optimistic traders would view as a new trigger.
In the meantime, US Treasury bond yields continue to drop as a result of the "Trump trade" being unwound and speculation that the Fed would further cut interest rates in the face of a weakening labor market. This helps to limit the downside for the non-yielding gold price and does not help the US Dollar (USD) build on the overnight recovery from a two-week low.
Technical Outlook:
Technically speaking, the pullback from the all-time high and the failure last week close to the upper boundary of an ascending channel that began in late July could be interpreted as an indication of bullish exhaustion. As a result, any more decrease is more likely to encounter some support in the $2,720–2,715 horizontal zone. Below this, the price of gold may attempt to test the trend-channel support, which is presently situated close to the psychological level in the $2,700 area.
On the other hand, the $2,745-2,750 range currently appears to be an impending barrier before the $2,790 range or the record high that was reached last Thursday. The psychological level at $2,800 and the rising channel resistance, which is located in the $2,815 zone, come next. The gold price can continue its recent, well-established rise if it maintains strength above the latter, which optimistic traders would view as a new trigger.
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