XAU/USD Current price: $2,719.65
- Rising US Treasury Yields and US Dollar Strength
- Tight Polls Ahead of US Elections
- Spot Gold Reaches Record High Before Retracement
Spot Gold hit a new high of $2,758.36 before pulling back to around $2,720 as the US Dollar remains strong amidst global uncertainty. With the US presidential election looming, markets are on edge, leading to a risk-averse environment and pressure on global stocks. In this volatile atmosphere, investors are closely watching government bond yields, which have risen in anticipation of the upcoming election.
As the US heads to the polls in just over two weeks, Vice President Kamala Harris and former President Donald Trump are neck and neck in the polls, creating uncertainty in the markets. While Harris currently holds a slight lead, the margin is too close to call.
Meanwhile, US Treasury yields continue to climb, with the 10-year note offering 4.26% and the 2-year note yielding 4.06%, levels not seen since July.
XAU/USD Short-term Technical Outlook
The XAU/USD pair is hovering around the 23.6% Fibonacci retracement level at $2,721.20, showing signs of a corrective pullback. If the decline continues, the next support level to watch is at $2,698.66, the 38.2% retracement level.
On the daily chart, technical indicators are pointing downwards, with the RSI and Momentum indicators correcting from overbought levels. A break below the daily low of $2,708.57 would confirm the bearish bias. However, moving averages are still bullish, indicating a long-term uptrend.
Looking at the 4-hour chart, a near-term downward trend is likely to continue. Key support levels to monitor are at $2,708.50, $2,698.60, and $2,680.10, while resistance levels are at $2,732.70, $2,744.10, and $2,758.40.
Analysis
As the world’s top investment manager, it is essential to stay informed about the latest market developments, such as the rise in US Treasury yields and the tightening race in the US presidential election. These factors have a direct impact on the price of gold, as seen in the recent record high followed by a pullback.
For the average individual, understanding these market dynamics can help make informed decisions about their financial future. With rising Treasury yields and a strong US Dollar, gold prices may face further pressure in the short term. Keeping an eye on technical indicators and support/resistance levels can provide valuable insights for traders and investors alike.
Overall, staying informed about global events and their impact on financial markets is crucial for anyone looking to secure their financial future and navigate uncertain times with confidence.