- Gold is currently trading within a $50 range, remaining below its recent record high of $2,758, supported by safe-haven demand.
- Persistent bombing by Israel and heightened uncertainty regarding the outcome of the U.S. presidential election are contributing to this demand.
- XAU/USD is establishing a mini range within a larger uptrend, with the potential for further higher highs.
Gold (XAU/USD) remains within this week’s mini range, trading in the $2,720s on Friday, supported by safe-haven flows amid heightened geopolitical risks. The ongoing conflict in the Middle East and uncertainty surrounding the US presidential election are driving investors towards gold as a safe asset.
Geopolitical Tensions Bolster Gold Prices
As the war in the Middle East escalates, gold continues to attract safe-haven flows. Reports indicate that three Lebanese journalists were killed in a bombing targeting a guesthouse used by international press members, including Al Jazeera and Reuters. Israel’s intensified bombing campaign has devastated residential areas in Beirut, with attacks causing significant civilian casualties, including the death of a child near a hospital.
In Doha, US Secretary of State Antony Blinken is engaging with representatives from Israel and Qatar to negotiate a resolution to the conflict. Concurrently, Egyptian diplomats have met with Hamas representatives in Cairo for similar discussions. However, Hamas officials maintain a hardline stance, insisting that hostages will only be released if hostilities cease and a complete withdrawal occurs.
Adding to the geopolitical landscape is the rising profile of Republican nominee Donald Trump, who is gaining ground in key swing states, including Pennsylvania and Wisconsin. Polls suggest he has a slight edge, with FiveThirtyEight’s model indicating a 51% chance of winning the election. Despite this, Vice President Kamala Harris still leads in aggregate polling, although betting markets favor Trump.
A potential Trump victory could disrupt the geopolitical status quo, which may lead to increased safe-haven demand for gold, even as he claims to resolve conflicts swiftly.
Technical Analysis: Gold Consolidation
Gold is currently trading sideways in a range between $2,708 and $2,758 after reaching the latter level. Despite this consolidation, the yellow metal remains in a robust uptrend across all time frames. According to the technical principle that “the trend is your friend,” the outlook favors further upside potential.
A break above the upper range at $2,758 could signal a continuation towards the next major target of $3,000, a significant psychological level.
XAU/USD Daily Chart
The Moving Average Convergence Divergence (MACD) is indicating a bearish divergence between the high on September 26 and the current price levels. While the price has increased since that peak, the MACD has declined, signaling a reduction in bullish momentum and hinting at a potential pullback.
Nonetheless, gold’s overall strong uptrend suggests that any corrections are likely to be brief, with the broader bullish trend expected to resume afterward.
