GOLD Price Analysis – Nov 01, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its bullish rally and drew some further bid around $2,757 level on Friday. However, the ongoing uncertainties surrounding the US presidential election and long-lasting tussle in the Middle East have played a major role in underpinning gold prices.
This is because gold is seen as a safe-haven asset, meaning investors turn to it during times of uncertainty and instability to protect their wealth.
Although, the upticks in the gold could be limited as the rising US Treasury bond yields and a stronger US Dollar put downward pressure on gold prices.
Moving ahead, traders are now looking ahead to the US employment report for October, which will be released on Friday. This report includes key figures like Nonfarm Payrolls (NFP), the Unemployment Rate, and Average Hourly Earnings.
US Dollar Faces Downward Pressure Amid Inflation Data and Rate Cut Expectations
On the US front, the broad-based US dollar failed to sustain its upward trend and face mild downward pressure following recent inflation data. The Personal Consumption Expenditure Price Index (PCE), a key measure of inflation, rose by 2.1% year-on-year in September, slightly lower than August's 2.2%.
This result matched what many experts expected. Meanwhile, the core PCE, which excludes food and energy prices, increased by 2.7%, the same as the previous month and higher than the anticipated 2.6%.
As a result, the expectation that the Federal Reserve might lower interest rates by 25 basis points in the upcoming November and December meetings could further weaken the dollar, as lower rates typically make a currency less attractive to investors seeking returns.
Investors are now looking ahead to the Nonfarm Payrolls (NFP) report, which will provide more insight into the job market. The report, set to be released on Friday, is expected to show that the US economy added 113,000 jobs in October, with the unemployment rate likely holding steady at 4.1%.
If job additions fall short of expectations, it could reinforce concerns about the economy and lead to an even weaker dollar. This situation could bolster gold prices, as many investors view gold as a safe haven during times of economic uncertainty.
Gold Gains Momentum Amid US Election Uncertainties and Middle East Tensions
The safe-haven yellow metal has been gaining momentum as the uncertainties surrounding the US presidential election and ongoing tensions in the Middle East forced Investors to turn to gold because it is seen as a safe investment.
As per the latest report, Israel is currently on high alert for a possible response from Iran, which may react to Israel's recent attacks before the US presidential election.
Meanwhile, US officials are visiting the Middle East to stop any retaliation from Iran and to find ways to solve the ongoing problems in Lebanon and Gaza.
However, they are not sure if these efforts will result in a break from fighting before the election. In Lebanon, there are hopes for a ceasefire between Israel and Hezbollah, but fighting is still happening.
However, the Israeli military recently attacked areas in Beirut after Hezbollah fired rockets that killed seven people in Israel, including four workers from Thailand. In Gaza, Israeli recent airstrikes have caused at least 13 deaths and many injuries, worsening the situation in the region.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues its cautious ascent, currently trading around $2,755.03, as it inches closer to the immediate resistance at $2,760.76. This level, marked by a convergence of previous highs and the 50-day EMA at $2,770.84, serves as a pivotal zone.
A sustained break above this point could push gold toward the next resistance at $2,767.44, followed by a potential test of $2,777.25, reflecting strengthened bullish momentum. However, if gold fails to clear $2,760.76, it may signal consolidation or a mild retracement.
On the downside, immediate support is found at $2,745.14, near recent consolidation lows. Should selling pressure increase, further support awaits at $2,731.38, with a deeper floor at $2,719.66, where buyers may re-emerge.
The RSI currently sits at 48, suggesting neutral momentum but tilting slightly toward oversold, which could attract short-term buyers if support levels hold.
Overall, the market tone remains cautiously bullish, as gold's resilience near $2,753.75—a key pivot point—indicates underlying demand. However, gold’s upward potential hinges on its ability to break through the 50-day EMA resistance.
Gold’s path forward will likely hinge on broader market sentiment and its ability to clear key resistance at $2,760.76, a test that could set the tone for the week.
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