Gold Soars to New Highs: Bullish Momentum Driven by Fed Rate Cuts and Geopolitical Tensions

Gold has been setting new all-time highs for four consecutive days, peaking at $2,670.32 per troy ounce. This strong bullish momentum is fueled by several key factors, including the Federal Reserve’s 50 basis point rate cut, ongoing geopolitical tensions, and uncertainty surrounding the upcoming US presidential elections. These developments have bolstered gold’s appeal as a safe-haven asset.

Wednesday 04:30 am (GMT+3) – Australia: CPI y/y (AUD)

Thursday 10:30 am (GMT+3) – Switzerland: SNB Policy Rate (CHF)

Thursday 15:30 (GMT+3) – USA: Final GDP q/q (USD)

Thursday 15:30 (GMT+3) – USA: Unemployment Claims (USD)

Friday 15:30 (GMT+3) – Canada: GDP m/m (CAD)

Friday 15:30 (GMT+3) – USA: Core PCE Price Index m/m (USD)

Gold has reached new all-time highs for four consecutive days, with a recent peak at $2,670.32 per troy ounce. This upward momentum is driven by a combination of positive market sentiment, the Federal Reserve’s recent 50 basis point rate cut, escalating geopolitical tensions, and uncertainty surrounding the upcoming US presidential elections. These factors are fueling demand for the metal as a safe-haven asset, supporting its continued rise. Technical indicators, such as the Bollinger Bands, the Relative Strength Index, the Momentum oscillator, and the Exponential Moving Average, also support the uptrend. In particular, prices are above the 50-period Exponential Moving Average, the Momentum oscillator, and the Relative Strength Index register values above the 50 and the 100 baselines, respectively. Also, the widening of Bollinger Bands and prices closing above the Upper Band signal the continuation of the uptrend. However, there is a negative divergence between the oscillators and the price, suggesting that a potential market correction may be imminent.

Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:

2676.83: The initial resistance is set at 2676.83, which corresponds to the weekly resistance (R2) calculated using the standard pivot point methodology.

2694.98: The second price objective is projected at 2694.98, corresponding to the 261.8% Fibonacci Extension, calculated between the swing high of 2483.57 and the swing low of 2352.91.

2724.98: The third price target is established at 2724.98, aligning with the 423.6% Fibonacci Extension level, calculated from the swing high of 2531.53 to the swing low of 2471.75.

2906.39: An additional price target is seen at 2906.39, estimated at the 423.6% Fibonacci Extension drawn from the peak at 2589.49 down to the trough of 2546.58.

Should the sellers take market control, traders may consider the four potential support levels listed below:

2597.78: The initial support level is identified at 2597.78, based on the weekly Pivot Point calculation using the standard methodology.

2546.58: The second support level is positioned at 2546.58, corresponding to the low established on September 18.

2471.75: The third support level is situated at 2471.75, in alignment with the daily low recorded on September 4.

2351.91: An additional downside target is noted at 2351.91, corresponding to the daily low established on July 26.

Gold reached a new all-time high, rising to $2,670.32 per ounce, driven by expectations of further interest rate cuts from the Federal Reserve. Fed officials, including Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari, signaled the possibility of additional rate reductions. Traders are awaiting key economic data, including US personal consumption and jobless claims, which could influence the Fed’s future rate decisions. Gold’s rally this year has been supported by central bank purchases, haven demand, and ongoing geopolitical tensions.
Gold serves as a safe-haven asset during economic uncertainty, with rising global tensions and inflationary concerns making it a valuable portfolio diversifier. Central banks are increasing their gold reserves, providing strong demand that supports higher prices. Additionally, technological innovations in electronics and renewable energy are driving new demand for gold. With limited mining output and supply constraints, gold’s price could see continued upward momentum. However, investors should carefully consider market volatility before buying in.

In conclusion, gold’s recent surge to record highs, reaching $2,670.32 per troy ounce, is supported by a mix of favorable factors including the Federal Reserve’s rate cut, geopolitical tensions, and market uncertainty ahead of the US presidential elections. Technical indicators and strong demand from central banks further reinforce the bullish outlook. However, while the uptrend remains strong, potential market corrections could occur, and investors should remain cautious of volatility as economic data releases may influence future price movements.