Technical Analysis

GOLD Price Analysis – Oct 30, 2024

By LonghornFX Technical Analysis
Oct 30, 20243 min
Gold

Daily Price Outlook

Gold price (XAU/USD) maintained its upward trend and hit new highs around 2,789 level on Wednesday as more investors turned to gold due to rising US political uncertainty and lower US Treasury yields.

Investors are looking for safe investments as the US presidential election gets closer, with polls showing a close race between Vice President Kamala Harris and former President Donald Trump.

At the same time, Treasury yields have dropped after a sharp decline in US job openings in September. Since the Federal Reserve closely watches the job market to decide on interest rates, this data makes a 0.25% rate cut likely next week. Therefore, these combined factors have driven up gold prices as investors seek stability.

Impact of Mixed Economic Data on Gold Prices and Market Outlook

On the US front, the broad-based US dollar lost its recent strength, turning bearish as new data showed a mixed picture of the economy. US JOLTS Job Openings fell to 7.44 million in September, with August’s number revised down to 7.86 million from 8.04 million, hinting at a weaker labor market ahead of Friday’s Nonfarm Payrolls (NFP) report.

However, consumer confidence rose significantly, with the Conference Board’s index climbing to 108.7 in October from 98.7 in September, beating expectations of 99.5 and suggesting that consumers are feeling optimistic.

At the same time, the chances of a Fed rate cut have grown, with the CME Group’s Fed Watch tool now showing a 99.6% likelihood of a 0.25% cut next week, up from 92% on Tuesday, and a 76.6% chance for another cut in December.

Besides this, 10-year Treasury yields eased from 4.33% to 4.23%, providing further support to precious metals.

The mixed economic data, including falling job openings and rising consumer confidence, alongside expectations of a Fed rate cut, are likely to boost gold prices. Lower Treasury yields also support gold as a safe-haven asset amidst economic uncertainty.

Moving ahead, the attention now turns to Wednesday’s GDP report, expected to show 3% annual growth for Q3, and ADP employment data, which is forecast to dip from 143K to 115K, potentially raising questions about the upcoming NFP report.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) – Technical Analysis

Gold currently trades at $2781.47, holding above the $2782.01 pivot point amid bullish momentum. Immediate resistance lies at $2790.05, with additional hurdles expected at $2798.12 and $2805.15.

This upward momentum is supported by a high Relative Strength Index (RSI) reading of 76.00, suggesting that gold is nearing overbought conditions. The 50-day Exponential Moving Average (EMA) at $2744.78 serves as a crucial support level and confirms the uptrend, providing a solid base for potential pullbacks.

A break above $2790.05 could signal further bullish advances toward $2805.15, yet caution is warranted given the elevated RSI. On the downside, immediate support is positioned at $2773.75, with further backing at $2764.12 and $2753.97.

A failure to hold these levels might indicate a bearish correction. Traders are advised to consider a selling entry below $2782, with a target of $2769 and a stop loss at $2790, aligning with technical resistance.

Gold remains above its pivot, but traders should remain cautious due to potential overbought conditions.

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GOLD

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