Article by: ETO Markets

From a fundamental perspective, gold prices received buying support in the Asian market on Tuesday, driven by geopolitical tensions in the Middle East and uncertainty in the US presidential election, and rebounded to the $2,757-$2,758 area. At the same time, the decline in US Treasury yields has limited the trend of the US dollar, further supporting gold prices. However, market expectations that the Federal Reserve may only make small interest rate cuts in the future, as well as fiscal deficit concerns after the election, may still support US Treasury yields and the US dollar, which limits the upside of gold. In addition, the optimistic sentiment in global stock markets also puts some pressure on gold. Investors are cautious ahead of the release of important US macroeconomic data this week, including third-quarter GDP, core PCE price index and non-farm payrolls, and market volatility may increase in the short term.

From a technical perspective, gold prices need to break through the supply band in the $… area to provide new impetus for bulls. If successfully broken, the rally could push gold prices above the all-time high of $… and further challenge the four-month ascending trendline resistance near $…-$…, and could even rise to the $…round number. However, the relative strength index (RSI) on the daily chart is close to the overbought zone, which requires bulls to remain cautious. Therefore, it may be safer to wait for a short-term consolidation or a minor pullback before further positioning. For now, any pullback may find support at the overnight low of $… area, followed by the $… area. If the price clearly breaks below this support range, it may trigger technical selling and push the gold price further below $… and even test the $… and $…-$… levels.