Since the start of trading this week gold XAU/USD starting what investors expect to be a tumultuous trading week. Investors are preparing for the US midterm elections on Tuesday and the October inflation reading later this week. The price of gold XAU/USD recorded the resistance level of 1682 dollars an ounce and settled around the level of 1670 dollars an ounce at the time of writing the analysis.
Today, Tuesday, millions of Americans will head to the polling booth in an election contest Democrats call "the future of democracy," while Republicans say this is an election about crime and the economy. According to FiveThirtyEight, Republicans expected to restore the US Senate with 54 seats. On the House side, Republicans are expected to win 82 seats and sail with a majority. It remains unclear whether investors will take any shares in the election. But according to RBC's Laurie Calvasina, "the conventional wisdom that the stock market likes political deadlock is backed up by historical data in this case."
Financial markets prefer a Democratic president and a Republican-led Congress.
The US inflation rate for October will be released on Thursday. The market consensus is for a headline reading of 8%, which would be below 8.2%. But the Cleveland Fed Nowcast shows that inflation could come in at 8.1%. It should also be noted that the Cleveland Fed has downgraded its inflation estimate for 16 of the last 19 months. Core inflation, which wipes out the volatile food and energy sectors, is expected to ease slightly to 6.5%.
Meanwhile, the US Dollar Index (DXY), which measures the greenback against a basket of major currencies, fell to 110.53, from an opening at 110.88. The index is up more than 15% since the beginning of the year. A weak US dollar is a good thing for dollar-denominated commodities as it makes them cheaper to buy for foreign investors.
Other factors affecting the gold market
The US Treasury market yields were green across the board, with the 10-year bond yield rising 1.8 basis points to 4.176%. The yield on the one-year note rose 3.5 basis points to 4.779%, while the yield on the 30-year note rose half a basis point to 4.251%. The recessionary spread between two-year/10-year bond yields approached -60 basis points.
In other metals markets, copper futures fell to $3.605 a pound. Platinum futures rose to $975.30 an ounce. Palladium futures rose to $1,865.50 an ounce.
XAU/USD Gold Price Forecast Today:
According to the performance on the daily chart, the price of gold XAU/USD is still stabilizing bullishly.
The stability of the price above the top of 1685 dollars per ounce will support the move towards the psychological top of 1700 dollars per ounce, respectively. The strength of the upward trend is confirmed. I still prefer buying gold from every bearish level, taking into account the current stability, unless it gains momentum. The price of gold may be exposed to some profit-taking operations until the US inflation figures are announced.
The closest support levels for gold are currently 1665 and 1638 dollars, respectively. Amid the absence of important and influential economic data, the price of gold may move according to investor sentiment.
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