Market Analysis

The price of gold recovers most of its small intraday losses and stays below the $2,750 mark

Amos Simanungkalit · 28 Oct90.7K Views

Gold price (XAU/USD) regains much of its intraday decline, climbing back above the $2,740 mark to reach a new daily high as the European session approaches on Monday. Safe-haven demand fueled by Middle East tensions and uncertainty surrounding the upcoming US election supports the precious metal’s appeal. Additionally, a slight retreat in the US Dollar from its highest level since July 30 provides further support for gold.

At the same time, expectations of moderate rate cuts by the Federal Reserve (Fed), along with concerns about increased deficit spending following the US election, continue to keep US Treasury bond yields elevated. A generally positive sentiment in equity markets, however, could limit gold’s upside. Traders also appear cautious ahead of critical US economic data releases this week, including the Advance Q3 GDP report, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) data.

Technical Analysis: Awaiting a Breakout for Directional Move

From a technical standpoint, gold’s repeated inability last week to sustain momentum beyond the $2,748-2,750 range suggests caution for bullish traders. The recent sideways trading pattern seen over the past week highlights market indecision about gold’s next directional move. Thus, it may be wise to wait for a sustained push above this resistance zone or a clear break below the short-term support area near $2,720-2,715 before committing to a near-term trend.

Should buying pressure push gold above the $2,748-2,750 range, the price could revisit the recent high around $2,658-2,659 set earlier this month. Further gains might propel XAU/USD toward the $2,770 mark, meeting a four-month-old ascending trendline resistance, with potential to reach the $2,800 psychological level.

Conversely, a sustained drop below the $2,720-2,715 zone could find initial support at the $2,700 level. A decisive break here may open the door to deeper declines, targeting interim support near $2,675, with the possibility of a slide toward the $2,657-2,655 horizontal support area.