- Gold regains positive traction and reverses part of the previous day’s decline.
- Falling US bond yields trigger profit taking around the USD and benefit XAU/USD.
- Geopolitical risks and political uncertainty in the US contribute to the intraday bullish movement.
The price of Gold (XAU/USD) attracts some buying during the Asian session on Thursday and stops the overnight pullback from a new all-time high. Political uncertainty in the US ahead of the November 5 presidential election and tensions in the Middle East turn out to be key factors that continue to act as a tailwind for the safe-haven asset. In addition to this, falling US Treasury yields trigger profit-taking around the US Dollar (USD) and offer additional support to the non-yielding yellow metal.
That said, the prospects of smaller interest rate cuts by the Federal Reserve (Fed) and concerns about deficit spending after the US elections should limit any significant decline in US bond yields. This, in turn, favors USD bulls, warranting some caution before opening new bullish positions on the price of Gold and positioning for the resumption of the recent uptrend. Traders now await the release of preliminary PMIs for fresh insight into the health of the global economy and some momentum.
Daily Market Summary: Gold Price Benefits from Safe-Haven Flows, Falling US Bond Yields and USD Weakness
- The US dollar and US Treasury yields hit their highest level in three months, prompting intraday profit-taking in the price of Gold on Wednesday.
- Robust US macroeconomic data suggested the economy remains in a strong position and dampened hopes for more aggressive easing by the Federal Reserve.
- Additionally, recent comments from a number of influential Fed officials suggested that the central bank will proceed with modest interest rate cuts over the next year.
- The CME Group’s FedWatch tool indicates that traders are pricing in more than 90% the chance that the Fed will cut borrowing costs by 25 basis points in November.
- Meanwhile, the chances of former President Donald Trump winning the US presidential election on November 5 are fueling speculation about the launch of inflation-causing tariffs.
- Investors remain concerned that the spending plans of both Vice President Kamala Harris and Republican candidate Donald Trump will further increase the deficit.
- The Israeli military carried out airstrikes in southern Lebanon and the suburbs of Beirut after Hezbollah fired rockets at two bases near Tel Aviv and west of Haifa.
- This is in addition to the impending Israeli attack on Iran, in retaliation for the latter’s ballistic missile attack on October 1, and lends support to the XAU/USD.
Technical outlook: Gold price could attract sellers near the $2,730-2,732 region, breakout point of ascending channel support
From a technical perspective, the overnight break below a short-term uptrend channel support could be seen as a new trigger for bears. Furthermore, the negative oscillators on the hourly charts suggest that the path of least resistance for the price of Gold is downward. That said, it will still be prudent to wait for a convincing break below the $2,700 mark before positioning for further losses. XAU/USD could then accelerate the corrective decline towards the intermediate support at $2,685 en route towards the strong horizontal resistance breakout point at $2,672-2,670.
On the other hand, the breakout point of the ascending channel support, around the $2,730-2,732 area, now appears to act as an immediate obstacle. The next relevant resistance lies near the $2,750 region, above which Gold price could resume its well-established uptrend and rise further towards the $2,770-2,775 zone before aiming to conquer the round mark. of $2,800.
US Dollar PRICE Today
The table below shows the percentage change of the US Dollar (USD) against major currencies today. US dollar was the strongest currency against the Swiss franc.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.09% | -0.04% | -0.27% | -0.11% | -0.16% | -0.15% | -0.01% | |
EUR | 0.09% | 0.03% | -0.20% | -0.02% | -0.09% | -0.08% | 0.04% | |
GBP | 0.04% | -0.03% | -0.24% | -0.07% | -0.16% | -0.13% | -0.01% | |
JPY | 0.27% | 0.20% | 0.24% | 0.19% | 0.12% | 0.09% | 0.25% | |
CAD | 0.11% | 0.02% | 0.07% | -0.19% | -0.05% | -0.05% | 0.06% | |
AUD | 0.16% | 0.09% | 0.16% | -0.12% | 0.05% | 0.02% | 0.14% | |
NZD | 0.15% | 0.08% | 0.13% | -0.09% | 0.05% | -0.02% | 0.11% | |
CHF | 0.01% | -0.04% | 0.00% | -0.25% | -0.06% | -0.14% | -0.11% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the box will represent USD (base)/JPY (quote).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.