XAU/USD Current Price: $2,741.03
- The Impact of the US Presidential Election on XAU/USD
- Federal Reserve Interest Rate Decision and Market Expectations
- Technical Analysis of XAU/USD Short-Term Outlook
Spot Gold experienced a slight uptick in price on Tuesday as investors turned away from the US Dollar. The optimism in global equities and the ongoing US presidential election have put pressure on the USD. The election, which is happening today, is a closely contested battle between Democrat Vice-President Kamala Harris and Republican former President Donald Trump, with no clear frontrunner emerging.
As the polls close at 19:00 EST or 00:00 GMT, market movements will be influenced by exit polls, although the final outcome may take a few days to determine. The focus will be on the seven key swing states, with Georgia, North Carolina, and Pennsylvania among the first to report their results.
In addition to the election, the Federal Reserve is set to announce its decision on interest rates on Thursday. The market consensus expects a 25 basis points cut, with the possibility of further cuts in December. However, the election outcome could alter the Fed’s trajectory. A Trump victory may lead to inflationary concerns and a pause in monetary easing. Some speculators even suggest a potential interest rate hike in the future.
Amidst this uncertainty, clarity will come in the next few days, post-election results, and Fed Chairman Jerome Powell’s press conference after the rate decision.
XAU/USD Short-Term Technical Analysis
Leading up to crucial events, the XAU/USD pair remains range-bound around $2,740. The daily chart shows a lack of decisive movement for three consecutive days. The bullish 20 Simple Moving Average (SMA) acts as strong support at $2,710, with the 100 and 200 SMAs also trending higher. Technical indicators suggest a positive sentiment, with slight downward movements.
On the 4-hour chart, XAU/USD appears bearish below the 20 SMA, while finding support at the 100 SMA around $2,724. With technical indicators indicating seller dominance, the risk leans towards a downside movement.
Key Levels:
- Support: $2,724.00, $2,710.00, $2,698.20
- Resistance: $2,747.75, $2,760.40, $2,772.50