Gold Holds at Highs on US Elections and Middle East Tension

10月22日

Political and Geopolitical Impact:
The gold metal has rallied 40% so far in 2024 and gold prices remain near record highs due to growing risk aversion triggered by political uncertainty in the US and geopolitical tensions in the Middle East. With the U.S. presidential election just two weeks away, the race between Donald Trump and Kamala Harris appears to be very tight, adding to investor concerns. This uncertainty has strengthened demand for safe haven assets such as gold, as traders seek to protect themselves from potential fluctuations in financial markets.
In addition, the situation in the Middle East, following an attempted drone strike against Israeli Prime Minister Benjamin Netanyahu and the Israeli military offensive against Hamas and Hezbollah, has added further stress to the markets. The possibility of a military strike against Iran has further raised fears of an escalation in the conflict, leading investors to take refuge in gold and other precious metals.

Technical and Fundamental Analysis:
(Ticker AT: GOLD) Spot gold was up 0.5% in Asian trading this morning at $2,734.38 per ounce, and above the $2,700 level we indicated in previous weeks, while gold futures were up 0.4% at $2,748.40 per ounce. These levels remain close to the all-time high of $2,740 per ounce reached yesterday, Monday. The strength of the dollar, which reached its highest level in three months, failed to slow the precious metal's advance due to the safe haven it offers amid uncertainty. Looking at the price bell, the checkpoint is located in areas similar to previous weeks around $2,500. The latest pullback has started from $2,668 with enough strength to move the RSI up to 73.30%. This could indicate that if the situation continues to extend the next price target could test the $2,800 level. The golden cross indicates that since June 27th the 50-average has been moving above the 200-average practically in parallel, which indicates that this movement does not look like it will stop immediately.

From a fundamental standpoint, gold's strength is also supported by expectations that the Federal Reserve will cut interest rates at a slower pace than anticipated. This scenario has boosted safe-haven demand, despite the fact that a stronger dollar usually negatively affects gold prices.

In addition, other precious metals also showed solid performance. Platinum rose 0.4% to $1,019.60 per ounce, while silver advanced 0.7%, approaching a 12-year high.
Ion Jauregui - ActivTrades Analyst





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