As the 2024 US presidential election approaches, gold price remain stable around 2 735 dollars per ounce, offering little fluctuations in the context of geopolitical and economic uncertainties. Investors are showing interest in this security asset, in response to growing risks in the Middle East and the US campaign.
Global tensions keep gold afloat
Gold, often prized as a safe haven, is attracting increased demand during this period of political instability. The presidential election, close between Kamala Harris and Donald Trump, exacerbates uncertainty and encourages market players to diversify their positions, in part to protect themselves against potential fluctuations.
Also read: Can the results of the US presidential election cause the price of gold to fall?
At the same time, tensions in the Middle East are also providing support for gold prices. Iran recently warned of retaliation after strikes in late October, and the United States responded by warning of any additional attacks. In this tense context, investors are opting for assets less exposed to turbulence.
Fed rate cut forecasts influence markets
Expectations of a reduction in interest rates by the Federal Reserve continue to fuel speculation. Due to signs of a slowdown in the U.S. labor market, some analysts are anticipating looser monetary measures, which has contributed to a notable decline in U.S. Treasury bond yields. This situation weakens the US dollar (USD)thus adding an additional supporting factor to the gold price.
The fall in US bond yields, particularly those at 10 and 2 years, marks a record for the last two months, thus accentuating the defensive position of investors. The resulting dollar weakness provides a slight boost to the price of gold, which is usually sensitive to movements in the US currency.
Technical analysis: critical thresholds for the price of gold
On a technical level, the price of gold has recently encountered a résistance at the upper level of an ascending channel initiated since the end of July. After hitting an all-time high, gold suffered a slight pullback, suggesting possible bullish fatigue. Analysts note that if gold falls below the threshold 2 720 $it could begin a more marked decline, with support envisaged around 2 690 $.
On the other hand, a breakthrough beyond 2 750 $ would provide room for a rise towards the recent peak of 2 800 $. This threshold would represent a potential trigger for optimistic investors who would then bet on a continuation of the upward trend.
Key indicator: ISM Services PMI awaited with attention
On the economic level, the indicator ISM Services PMIexpected this afternoon, will provide an overview of activity in the U.S. services sector. This barometer is particularly followed by investors, because a score above 50 reflects expansion in the sector. A lower value could put further pressure on the dollar and potentially increase the appeal of gold.
The ISM PMI remains a popular indicator for assessing the strength of the US economy, indirectly influencing gold prices through its effects on the dollar and economic expectations. Depending on the results, markets could adjust their positions, making the evolution of the gold price even more volatile in the days to come.
The situation remains complex and constantly evolving, with each indicator and each position taken having the potential to steer the gold market towards new highs or new supports.
