XAU/USD Current price: $2,719.65

• Rising US Treasury yields amid looming US elections back the US Dollar.
• Polls show a tight intention vote between Vice President Harris and former President Trump.
• XAU/USD aims to extend its corrective advance, could pierce the $2,700 level.

Spot Gold reached yet another record high on Wednesday, trading as high as $2,758.36 before turning south. The bright metal retreated from such a high and trades at around $2,720 as the US Dollar maintained its positive momentum across the FX board. Financial markets are in risk-averse mode, with global stocks under pressure. Tech shares led the slide, albeit speculative interest is also looking at government bond yields, which jumped this week in anticipation of the United States (US) presidential election.

The world’s largest economy heads into the polls in little over two weeks, with no clear winner ahead of the event. It seems Vice President Kamala Harris is leading and has a roughly 2% lead over former President Donald Trump, yet the difference is barely significant.

Meanwhile, Treasury yields extended their weekly advance. The 10-year note currently offers 4.26%, while the 2-year note yields 4.06%, levels not seen since early in July.

XAU/USD short-term technical outlook  

The XAU/USD pair is currently stuck at around the 23.6% Fibonacci retracement of the $2,601.87/$2,756.36 rally at $2,721.20. The decline seems corrective, although it may continue towards $2,698.66, the 38.2% retracement of the same rally.

In the daily chart, technical indicators turned south, with the Relative Strength Index (RSI) indicator correcting overbought conditions and the Momentum easing from October highs. Both indicators support another leg lower, yet a break through the daily low at $2,708.57 will help confirm the slide. Additionally, it is worth mentioning moving averages maintain their firm upward slopes far below the current level, keeping the long-term bullish trend alive.

The 4-hour chart shows a near-term downward continuation is likely. Technical indicators head south almost vertically, crossing their midlines into the negative territory. At the same time, XAU/USD lost its bullish strength and turned flat, now providing dynamic resistance at around $2,732.70. Nevertheless, the 100 and 200 SMAs keep advancing far below the current level, limiting the downward potential of the pair.

Support levels: 2,708.50, 2,698.60, 2,680.10

Resistance levels: 2,732.70, 2,744.10 2,758.40

• Silver price faces selling pressure as US bond yields rise sharply.
• Middle East tensions and US political uncertainty will limit the downside in the Silver price.
• Trump’s victory could weigh on exports of US close trading partners.

Silver price (XAG/USD) corrects sharply below $34.50 in Wednesday’s New York session after registering a fresh more than 12-year high slightly below $35.00 on Tuesday. The rally in the white metal appears to have paused for a while as the US Treasury yields have extended its upside.

10-year US Treasury yields jump to near 4.24% as investors expect the Federal Reserve (Fed) to follow a gradual policy-easing cycle. Historically, higher yields on interest-bearing assets increase the opportunity cost of holding an investment in non-yielding assets, such as Silver. The US Dollar (USD), which tracks the Greenback’s value against six major currencies, revisits the August high of 104.45.

However, the upside trend remains intact due to multiple catalysts. From growing United States (US) political uncertainty to escalating Middle East tensions, every catalyst is acting as a tailwind for the Silver price.

According to the Reuters/Ipsos polls, current Vice President Kamala Harris leads by a slight margin against former President Donald Trump. However, market participants worry that Trump’s victory could result in higher tariffs and lower taxes, which could force the Federal Reserve (Fed) to return to the restrictive policy stance for a period of time.

In the Middle East region, the launch of a rocket salvo by Iran-backed-Hezbollah on Israel’s military base near Tel Aviv exhibits signs that tensions between them will stay afloat. The appeal of precious metals, such as Silver, as a safe haven, given that investors consider them as a hedge against dismal market sentiment.

Silver technical analysis

Silver price slumps after failing to capture the key resistance of $35.00. The white metal strengthened after breaking above the horizontal resistance plotted from the May 21 high of $32.50 on a daily timeframe, which will act as a support for now. Upward-sloping 20-day Exponential Moving Averages (EMAs) near $32.15 signal more upside ahead.

The 14-day Relative Strength Index (RSI) oscillates above 60.00, points to an active bullish momentum.

Silver daily chart

Created on October 23, 2024

• During my daily analysis of the West Texas Intermediate Crude Oil market, it’s obvious that we have seen a lot of buying pressure on Tuesday.
• At this point in time, the market is likely to continue to see a little bit of momentum based on the size of the candlestick, and it is probably worth noting as well, that most of the headlines and pundits around the world believe that this is based on the idea of renewed Chinese demand, or at least the optimism surrounding the possibility of it.

Furthermore, we also have geopolitical escalations out there that continue to be a major issue. Quite frankly, the Middle East isn’t calming down, and one would have to think that sooner or later it would have an influence on the oil market. I don’t necessarily think that the market is paying close attention to it right now, because quite frankly it’s been rather lackluster as of late. All things being equal, I think most of this comes down to the idea of demand, as traders are assuming that the conflict involving Israel and several factions in the Middle East probably won’t spread.

It was an extraordinarily bullish day on Tuesday, but we also have to pay attention to the fact that the 50 Day EMA sits right around the $72.70 level and is dropping. I would anticipate that the 50 Day EMA could offer a little bit of a ceiling in the market, as it is so widely followed. If we were to break above there, then I think it’s likely that we will continue to see oil go much higher, perhaps reaching the 200 Day EMA which is sitting just above the $76 level.

On the downside, there seems to be a significant amount of support at multiple levels, not the least of which would be the $66 level, which is the bottom of the range for the last 2 years. I think we are just simply bouncing from the lows, and that if you are a buyer of this market, you are essentially doing it for a short-term trade more than anything else. I would expect plenty of volatility in this general region.

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Created on October 23, 2024

• Despite the strong gains of the US dollar, the price of gold rose to around $2753 per ounce, trading at record levels, the highest in the history of the gold market.
• Its successive gains were supported by its status as a safe-haven asset.
• Reports indicated that tensions in the Middle East and broader global uncertainties have raised concerns about conflict escalation, further boosting demand for gold as a secure investment option.

In addition, the narrow US presidential election, which is only a few weeks away, is increasing demand for safe havens. At the same time, monetary easing from major global central banks is supporting the upward momentum of gold, as the People’s Bank of China and the European Central Bank recently cut key lending rates. At the same time, traders are assessing different views from Federal Reserve officials on the future path of US monetary policy.

In this regard, Kansas City Federal Reserve President Jeffrey Schmid is calling for a slower pace of interest rate cuts, while San Francisco Federal Reserve President Mary Daly stresses the need for further cuts to protect the Labor market.

According to gold trading platforms, gold prices are rising due to an imbalance between supply and demand. Gold prices had risen to an all-time high of $2,753 per ounce as investors sought safe-haven assets amid rising geopolitical tensions. Consequently, this means that the price of the yellow metal has risen by 38 percent this year 2024. The rise in gold bullion prices came as the conflict between Lebanon and Israel intensified, with concerns growing about a broader regional escalation. At the same time, uncertainty about the outcome of the US elections, with particular concerns about the improvement in Donald Trump’s chances in betting markets, has also pushed investors towards safe-haven assets.

Gold Price Analysis and forecast Today:

According to analysts, “gold usually attracts the attention of investors when they are looking for a store of value during uncertain times.”

Obviously, Gold is a proven hedge against inflation as investing in it is seen as preserving the real value of assets when other prices rise. It remains resilient when other markets are not. According to gold market analysis experts, “The gold price index tends to rise as interest rates fall due to the decline in the return on cash from banks, or bonds from governments, which pushes investors away from cash or debt towards the metal. And “A Trump victory in the US presidential election would increase the risk of a trade war, and his provocative nature could lead to increased uncertainty in the markets. And owning gold is essentially an insurance policy against the unknown.”

Analysts noted that investors’ appetite for gold has been boosted by “the risk of spillover into a wider conflict in the region” and uncertainty around the upcoming elections, making gold an attractive asset for those seeking to hedge against market volatility. The rising price of gold is a direct reflection of the fear and uncertainty facing investors.”

On the other hand, Chinese stimulus and a strong US economy are also boosting demand for gold. In addition to geopolitical factors, the second factor is the old supply and demand factors that affect the price of gold. Gold demand hit an all-time high in Q2, and we expect this rally to continue into Q3, and in the absence of increased supply, the price of gold will naturally rise.

Gold’s latest achievement comes amid growing concerns over conflicts in the Middle East and a tight US presidential election. Moreover, Gold is widely seen as a safe haven asset and attracts investors during times of geopolitical uncertainty. Furthermore, central banks around the world have been buying bullion in large quantities over the past year.

According to recent trading, the price of gold has risen by about 2.4% over the past week, as violence in the Middle East escalated and opinion polls showed a tight tie in the US presidential election. Furthermore, the gold price index is now up more than 30% this year as interest rates have been cut amid strong buying by central banks. Gold is not the only metal on the rise. Recently, Silver has jumped 5.5% in recent days and is now at its highest level since 2012. Also, Palladium and platinum are also on the rise.

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• Silver price holds position near a 12-year high of $34.87, recorded on Tuesday.
• The demand for safe-haven Silver rises amid escalating tensions in the Middle East.
• The tight situation in the upcoming US election has further heightened demand for safe-haven assets.

Silver price (XAG/USD) halts its six-day winning streak, trading around $34.87 per troy ounce, the highest level not seen since October 2012, during Asian trading hours on Wednesday. The outlook for Silver is bullish, driven by safe-haven demand amid escalating tensions in the Middle East.

On Tuesday, Israel confirmed the death of Hashem Safieddine, the successor to the late Hezbollah leader Hassan Nasrallah, who was killed in an Israeli operation last month. The Israeli military stated that Safieddine was killed in a strike conducted three weeks ago in the southern suburbs of Beirut, according to Reuters.

Additionally, US Secretary of State Antony Blinken conveyed to Israeli Prime Minister Benjamin Netanyahu on Tuesday that Israel’s efforts to facilitate increased humanitarian aid into Gaza have been inadequate. Blinken urged Israel to take further action to improve the situation.

The upcoming US election has further heightened demand for safe-haven assets like Silver. A recent Reuters/Ipsos poll indicates that Democratic Vice President Kamala Harris holds a narrow lead of 46% to 43% over former Republican President Donald Trump.

This lead, recorded in a six-day poll that closed on Monday, is only slightly up from her 45% to 42% advantage in a poll conducted a week earlier, highlighting the tightness of the race with just two weeks remaining before the November 5 election.

Additionally, demand for non-yielding Silver has been boosted by monetary easing measures from major central banks. The People’s Bank of China (PBoC) and the European Central Bank (ECB) have both recently reduced key lending rates, contributing to increased interest in Silver.

Furthermore, the Bank of Canada (BoC) is expected to announce a significant interest rate cut of 50 basis points during its upcoming monetary policy meeting on Wednesday. In contrast, expectations for aggressive rate cuts by the Federal Reserve have decreased following a series of positive economic data.