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MENAFN- Daily Forex)
Gold prices have risen sharply ahead of the US presidential election on November 5 and a series of key economic data releases due later this week. Furthermore, price approached record highs earlier in the session as traders shrugged off easing geopolitical tensions in the Middle East. At the time of writing, gold prices rose to the resistance level of $2,782 per ounce, the highest in the history of the gold market and the closest point to the upcoming historical resistance level of $2,800 per ounce.
At the beginning of this week's trading, according to gold trading companies, gold prices came under pressure as the Israeli attack on Iran over the weekend had a limited impact as it did not target any oil or nuclear sites. However, safe-haven demand for the yellow metal remains intact ahead of next week's US elections. Uncertainty over the outcome, which will determine US policy for the next four years, has kept traders on their toes.
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The uncertainty surrounding next week's elections could shape gold prices. Most opinion polls show former US President Donald Trump ahead of Vice President Kamala Harris. However, analysts believe the race will be close. Overall, the continued safe-haven demand stemming from tensions in the Middle East and US election tensions continues to act as a tailwind for the precious metal. Should Trump win, concerns over a trade war with China would increase safe-haven demand for gold. Moreover, Trump could also ease sanctions on Russia, while doubling them in Iran Data in Focus
Traders are also focusing on the release of third-quarter GDP data from the US on Thursday. Additionally, the Personal Consumption Expenditures (PCE) index, the preferred measure of the US Federal Reserve, will be released on Friday, along with non-farm payrolls data. All of these data are due ahead of the US Federal Reserve's policy meeting next week. If the data shows further economic slowdown, it could herald further interest rate cuts in the US.
Meanwhile, lower interest rates increase demand for non-yielding metals such as gold and silver.
According to the CME FedWatch tool, traders are pricing in a 95% chance of the US Federal Reserve cutting interest rates by 25 basis points at its November meeting. At its September meeting, the Fed cut rates by 50 basis points, surprising the market Price Analysis and forecast Today:
According to gold price forecast experts, gold prices are facing resistance at $2,770-2,775 per ounce. If prices break above $2,775 per ounce, the yellow metal could rally to $2,800 per ounce after that. Overall, COMEX gold prices have gained more than 30% since the beginning of this year. However, the Relative Strength Index (RSI) on the daily chart is about to break into the overbought zone and warrants some caution from bulls. Therefore, it would be wise to wait for some near-term neutrality or a modest pullback before placing any further discretionary move in the near term.
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