Article by: ETO Markets
From a fundamental perspective, the rise in gold prices is mainly supported by the approaching US presidential election, escalating geopolitical tensions in the Middle East, and expectations of interest rate cuts by major central banks. Although US Treasury yields soared to a three-month high and pushed the US dollar stronger, this failed to weaken the market's safe-haven demand for gold. In particular, amid election uncertainty and Trump's possible reintroduction of potentially inflationary tariffs, market interest in safe-haven assets continues to grow. In addition, the pace of interest rate cuts by the European Central Bank and the Bank of England has strengthened market expectations for global loose monetary policy, which has also offset the negative impact of high yields on gold to a certain extent.
From a technical perspective, gold prices have remained within an ascending channel over the past two weeks and are expected to challenge short-term channel resistance, around the $… area. However, the relative strength index (RSI) on the daily and 4-hour charts shows a slight overbought signal, suggesting that short-term consolidation or correction may occur. The current support level is $…, followed by the $… area at the lower edge of the channel. A break below this level may trigger a further correction and test the support levels of $… or even $…. If it falls below $…, the gold price may further fall back to the $…-$… area. Overall, although gold is still in a short-term upward trend, the risk of consolidation in the overbought state cannot be ignored.
