GOLD Price Analysis – Nov 04, 2024
Daily Price Outlook
Gold prices (XAU/USD) have shown a rebound and trading near $2,740 level. However, this uptick is largely driven by increased uncertainty surrounding the upcoming U.S. presidential election and escalating tensions in the Middle East.
Investors are turning to gold as a reliable store of value. However, the announcement of election results is scheduled for this Tuesday, keeping market watchers on high alert.
Analysts at JPMorgan suggest that regardless of the election outcome, a potential drop in gold prices could present an attractive buying opportunity for those looking to capitalize on market fluctuations. This week is expected to be crucial for gold as investors navigate through the prevailing uncertainty.
Gold Prices Under Pressure Amid US Election Uncertainty and Economic Data
On the U.S. front, the ongoing uncertainty surrounding the presidential election and ongoing tensions in the Middle East are likely driving increased demand for gold as a safe-haven asset. Investors typically turn to gold during periods of uncertainty, and with the election approaching, this demand is anticipated to grow.
In recent economic news, the weaker US job growth has sparked hopes for a rate cut. However, the October Nonfarm Payrolls (NFP) data showed an increase of only 12,000 jobs, the smallest gain since December 2020.
This is a major drop from the revised September figure of 223,000 and falls far below the market expectation of 113,000. Meanwhile, the unemployment rate held steady at 4.1%, which matched forecasts. This weak job growth may lead to a 25 basis points (bps) cut in interest rates from the Federal Reserve at their meeting next Thursday.
Hence, the rising demand for the US dollar and increasing bond yields create pressure on gold prices as higher yields make gold less attractive compared to other investments.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,741.66, up 0.19% for the day, and currently sits just above a key pivot level at $2,738.29. The immediate resistance at $2,745.32 will be closely watched, as a break above could pave the way for further gains, with additional resistance targets at $2,753.70 and $2,760.76.
These levels align with the 50-day Exponential Moving Average (EMA) at $2,754.12, reinforcing the $2,753.70 mark as a crucial hurdle for any sustained bullish momentum.
On the downside, immediate support rests at $2,731.80, with subsequent layers at $2,724.64 and $2,717.20. Should gold dip below these levels, it may signal a shift to a more bearish outlook, particularly as the RSI stands at 43, indicating neutral territory but leaning towards bearishness in the short term.
With the broader trend influenced by ongoing geopolitical tensions and market expectations for a potential Fed rate cut, the $2,738.29 pivot level becomes even more critical. A sustained move above this pivot could attract additional buying interest, targeting $2,753. Meanwhile, a dip below could invite sellers, pushing gold toward the lower support levels.
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