Gold Prices Continue to Break Records Towards $2,800 Per Ounce

- Gold prices continue to smash their record levels amid uncertainties surrounding the U.S. elections, ongoing tensions in the Middle East, and expectations of central banks cutting interest rates.

- Gold is considered a haven to hedge against political and geopolitical uncertainty, with spot gold reaching an all-time high of $2,740.37 and rising over 32% so far this year.

- A range of supporting factors for gold's rise remains, including its status as an attractive hedge against U.S. election uncertainties and geopolitical risks, sustained central bank demand, and the opportunity for increased ETF buying. Buyers seem to be looking towards the $2,800 level, as political uncertainty will persist with the approaching elections.

- With less than two weeks until the U.S. presidential election, former President Donald Trump and Vice President Kamala Harris are engaged in a fierce battle to win some of the most competitive states. The uncertainty surrounding the U.S. presidential election on November 5 is a supportive factor for gold.

- Traders now see an 87% chance of a 25-basis-point cut by the U.S. Federal Reserve in November, according to the CME Fedwatch tool.

- Last week, the European Central Bank lowered interest rates for the third time this year, marking the first back-to-back cut in 13 years, and is looking for further cuts amid an economic downturn. Weak inflation data from the UK has solidified bets for more aggressive rate cuts by the Bank of England, and the Federal Reserve is also expected to further lower borrowing costs.

- U.S. 10-year Treasury yields have risen to a 12-week high, while the U.S. dollar has maintained its strong recent gains, reaching its highest level since early August, although this has little effect on the strong positive sentiment surrounding gold prices.

Expected Movements for Gold

- From a technical perspective, the recent movement we’ve seen over the past two weeks indicates that gold is moving within an ascending price channel. This suggests a strong short-term uptrend and supports the likelihood of moving towards testing the channel resistance, currently around the $2,750 area, before targeting levels of $2,765 and then $2,780.

- Meanwhile, any corrective slide now seems to find some support near the $2,720 zone, followed by the $2,710 level. If this is decisively broken, it may pave the way for deeper losses.

- Subsequent declines could push the gold price below $2,700, and then towards the $2,685 support. The latter should act as a key pivotal point, as gold could accelerate its decline toward the resistance level of $2,662, which has now turned into support.

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