GOLD Price Analysis – Oct 25, 2024
Daily Price Outlook
Gold (XAU/USD) struggled to sustain its earlier bullish momentum, edging lower to around the $2,720 level on Friday as the US dollar regained strength amid rising expectations that the Federal Reserve might slow the pace of rate cuts.
Despite this, Gold remains bolstered by safe-haven demand, driven by elevated geopolitical risks. The ongoing Middle Eastern conflict and heightened uncertainty surrounding the upcoming US election are key factors steering investors toward safe assets like Gold.
Gold's Resilience Amid Escalating Geopolitical Tensions and US Election Uncertainty
Gold is expected to find continued support from safe-haven demand as tensions in the Middle East escalate. On Friday, three Lebanese journalists were killed in a bombing targeting a guesthouse frequently used by international press outlets, including Al Jazeera and Reuters.
This tragic event capped a week of intensified airstrikes by Israel on residential areas in Beirut, with bombs striking close to hospitals and leading to casualties, including a child and several Lebanese soldiers aiding in evacuations.
In diplomatic efforts, US Secretary of State Antony Blinken is meeting with representatives from Israel and Qatar in Doha to negotiate an end to the violence. This follows discussions in Cairo between Egyptian diplomats and Hamas members aimed at the same goal.
However, Hamas official Osama Hamdan has stated that the group’s position remains firm: hostages will only be released once aggression stops and a full withdrawal occurs.
In the US, election uncertainties add another layer of risk. Republican nominee Donald Trump is gaining traction, leading in recent polls in key states like Pennsylvania and North Carolina.
Although FiveThirtyEight’s model shows Vice President Kamala Harris slightly ahead, Trump’s growing odds have raised concerns over potential shifts in foreign policy, which could further support safe-haven flows into Gold.
Therefore, the intensifying Middle Eastern conflict and US election uncertainties are bolstering Gold's appeal as a safe-haven asset, likely driving prices higher as investors seek stability amid geopolitical risks and the potential for shifts in US foreign policy.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,723.99, down 0.30%, showing some weakness after briefly breaching the $2,727.96 pivot point. The precious metal remains under pressure as it hovers just above the key support at $2,720.89. Should gold fail to hold this support level, the next downside target is $2,701.94, followed by deeper support at $2,693.29.
On the upside, gold will need to overcome immediate resistance at $2,733.87 to regain some bullish momentum. Further resistance levels lie at $2,739.63 and $2,748.90, which could serve as key areas to watch for any potential recovery. The 50-day EMA sits at $2,733.22, acting as another significant resistance point.
Technically, the RSI is currently at 46, signaling a neutral to slightly bearish sentiment. This reading indicates that momentum remains weak, and further declines could be on the horizon unless we see a bullish push past the $2,733 resistance zone. However, should gold find support above $2,720 and manage to bounce back, we could witness a rally targeting $2,740 in the short term.
For traders, a buy-limit entry around $2,725, with a take-profit target of $2,740 and a stop-loss at $2,715, could provide a balanced risk-reward opportunity. However, the failure to maintain above $2,720 could open doors for further downside.
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