Gold Buyers Eye Higher Levels Amid Key Breakout

Market Overview

Gold has maintained its status as a safe-haven asset amid rising uncertainty, especially with the U.S. presidential election approaching on November 5th. Recent polling data suggests that former President Donald Trump is gaining ground against Vice President Kamala Harris, though the competition remains tight. As the election outcome will likely define U.S. policies for the next four years, traders have sought refuge in safe assets, boosting demand for gold.

On Tuesday, gold recovered all its losses from the previous session, which were prompted by a temporary easing of concerns regarding the Middle East conflict. Safe-haven demand has also been bolstered by anticipation of several significant economic reports due this week, which could shape the Federal Reserve’s upcoming decisions on interest rates.

Technical Analysis

In the four-hour timeframe, gold continues to climb, positioned in the upper half of the Bollinger Bands after breaking above the key resistance level of $2747.68. This breakout has reignited the bullish trend, with price action now encountering resistance at $2753.93, aligning with the 127.2% Fibonacci extension from the recent downswing. If buyers succeed in pushing the price beyond this resistance, further gains are anticipated, with the next targets at $2761.87 and $2770.64.

Technical indicators support the upward movement. The RSI hovers above the midpoint, signaling buyer strength, while the MACD continues to show positive momentum. Additionally, the price remains above the moving averages, reinforcing the bullish sentiment.

Alternative Scenario

A drop back below the recently broken resistance at $2747.68 could invalidate the bullish setup, bringing $2738.91 and $2724.72 into focus as key support levels. A move below these levels would highlight potential seller dominance and the possibility of a deeper retracement.

Key Levels Overview

Resistance Levels:

• Resistance 1: 2753.93
• Resistance 2: 2761.87
• Resistance 3: 2770.64

Current Price: 2753.00

Support Levels:

• Support 1: 2747.68
• Support 2: 2738.91
• Support 3: 2724.72

Key Events to Watch

This week, several major U.S. economic reports will be in focus. On Tuesday, Consumer Confidence and Job Openings figures for September are set to be released, both of which could significantly impact market sentiment. Additionally, Q3 GDP data is due on Thursday, followed by the PCE Price Index — the Federal Reserve’s preferred inflation gauge — and Non-Farm Payrolls on Friday. These releases are expected to play a pivotal role in shaping the trajectory of both the U.S. dollar and gold.

Conclusion

Gold’s bullish breakout suggests further gains, with resistance levels above $2753 in focus. Economic data this week will be crucial in determining whether the uptrend continues or if sellers regain control.

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