Gold Price News: Gold Tests High on Safe Haven Bid

Having rallied strongly at the end of last week, gold now appears poised for another push higher. However, economic drivers are little changed; while US rate markets have marginally eased, this has been offset by some firming of the US dollar. According to CME FedWatch the market is pricing in c. 0.5% of Fed rate cuts by the end of 2024 and a total of 1.25% by the middle of 2025. Nevertheless, gold starts Wednesday trading at $2676/toz.

Geopolitical tensions support gold prices

Geopolitics however continues to be a key support for gold, with ongoing conflict in the Middle East and uncertainty around US Elections on 6 November. In Europe, Ukrainian President Zelenskyy has now accused North Korea of sending troops to support the Russian offensive, implicating further Chinese involvement in the process. The ‘safe haven bid’ for gold remains strong and appears to be compensating for the lack of clear economic support.

Gold technical analysis and key levels

Looking at the gold chart, despite some volatility last week, and the broader picture of consolidating price action at elevated levels in October, gold seems poised to challenge key technical levels once again. This morning it appears to have breached the upper bound of the 26 June/ 17 July/ 25 July ascending channel at $2667/toz and is currently negotiating major horizontal resistance at $2673/toz.

Breakout and support levels to watch

Should a move above that level be sustained, the 100% and 161.8% Fibonacci extension levels at $2710/toz and $2820/toz respectively represent the initial and second breakout targets, separated by major ascending oblique resistance at $2756/toz.

To the downside, support is offered by a rising 20-Day Simple Moving Averages at $2645/toz minor ascending oblique support at $2622/toz, the 38.2% Fibonacci extension level at $2599/toz and the 50-day Simple Moving Average at $2562/toz.

Key economic events ahead

Today sees a speech from ECB President Lagarde ahead of Thursday’s ECB rate decision and press conference, where a 0.25% cut is expected. Today will also see a speech from Atlanta Fed President Bostic (hawk, voter), followed by September US Retail Sales data and a speech by Chicago Fed President Goolsbee (dove, non-voter) on Thursday.