As key economic events unfold, global markets brace for pivotal shifts. Central bank decisions and flash PMIs across major regions like Canada, Europe, the UK, and the US set the stage for economic sentiment in the near term. Gold continues to draw attention, fueled by geopolitical uncertainty and upcoming elections, with technical indicators suggesting both potential for further gains and caution for retracement. Amid this landscape, investors are keeping a close watch on gold’s performance, balancing its historic stability against the broader economic backdrop.
Overview
As key economic events unfold, global markets brace for pivotal shifts. Central bank decisions and flash PMIs across major regions like Canada, Europe, the UK, and the US set the stage for economic sentiment in the near term. Gold continues to draw attention, fueled by geopolitical uncertainty and upcoming elections, with technical indicators suggesting both potential for further gains and caution for retracement. Amid this landscape, investors are keeping a close watch on gold’s performance, balancing its historic stability against the broader economic backdrop.
Key Economic Events
Wednesday 16:45 (GMT+3) - Canada: Overnight Rate (CAD)
Thursday 11:00 am (GMT+3) - Europe: Flash Manufacturing PMI (EUR)
Thursday 11:00 am (GMT+3) - Europe: Flash Services PMI (EUR)
Thursday 11:30 am (GMT+3) - UK: Flash Manufacturing PMI (GBP)
Thursday 11:30 am (GMT+3) - UK: Flash Services PMI (GBP)
Thursday 16:45 (GMT+3) - USA: Flash Manufacturing PMI (USD)
Thursday 16:45 (GMT+3) - USA: Flash Services PMI (USD)
Friday 15:30 (GMT+3) - Canada: Retail Sales m/m (CAD)
Technical Analysis
In the second half of the year, Gold has experienced a strong rally, with consecutive higher peaks and higher troughs, indicating a healthy uptrend. After reaching multiple all-time highs, the precious metal is expected to continue appreciating, especially amidst geopolitical uncertainty and in anticipation of the US presidential election.
From a technical standpoint, Gold's outlook remains positive. It is currently trading above the 50-period Exponential Moving Average (EMA), showing sustained upward momentum. Moreover, the Momentum oscillator is above 100, and the Relative Strength Index (RSI) is holding above 50, indicating the likelihood of ongoing buying pressure in the short term. Additionally, prices have closed above the Upper Bollinger Band, signifying a continuation of the uptrend.
Upon closer examination, a negative divergence between the price and the Momentum oscillator, along with the RSI entering the overbought area, suggests a potential retracement.
Potential Upside Targets
Should the bulls maintain market control, traders may direct their attention toward the four potential resistance levels below:
2749.74: The initial resistance is 2749.74, which aligns with the weekly resistance, R1, estimated using the standard Pivot Points methodology.
2778.33: The second price target is identified at 2778.33, corresponding to the weekly resistance, R2.
2815.68: The third target is established at 2815.68, aligning with the 161.8% Fibonacci Extension drawn from the swing high of 2685.56 down to the swing low of 2602.36.
2945.80: An additional price target is estimated at 2945.80, corresponding to the 423.6% Fibonacci Extension drawn from the swing high of 2685.56 down to the swing low of 2602.36.
Potential Downside Targets
Should the sellers take market control, traders may consider the four potential support levels listed below:
2685.56: The first level of support is identified at 2685.56, representing the swing high formed on September 26.
2602.36: The second support level is 2602.36, reflecting the swing low marked on October 10.
2580.82: The third support level is identified at 2580.82, representing the weekly support, S3, estimated using the standard Pivot Points methodology.
2531.64: An additional downward target is observed at 2531.64, corresponding to the daily peak formed on August 20.
Fundamentals
Gold has proven to be a strong investment choice, especially in uncertain times. Its price has steadily risen throughout 2024, hitting a record high of over $2,753 per ounce in October. Known for its stability, gold acts as a reliable hedge against inflation and economic downturns. In recessions, like the 2008 financial crisis, gold surged over 130%, demonstrating its resilience. While other assets may fluctuate, gold remains a safe haven, offering protection and value preservation in volatile markets. For investors seeking long-term security, gold remains a key asset to consider.
Conclusion
In conclusion, as global markets navigate key economic events, gold remains a focal point for investors, offering a blend of stability and growth potential. With technical indicators favoring an uptrend but signaling possible retracement, the precious metal continues to serve as a reliable hedge against uncertainty. Whether driven by geopolitical tensions, inflation concerns, or economic fluctuations, gold’s performance underscores its enduring role as a safe haven in volatile markets, making it a critical asset for long-term security. Investors should remain vigilant, balancing its proven track record with evolving market conditions.