On October 31st, global financial markets were stirred by the U.S. elections and political instability in the Middle East, leading to a rise in safe-haven sentiment. Gold prices surged to $2,790 per ounce, setting a historical record, underscoring the strong appeal of safe-haven assets. Since the start of the year, gold prices have increased by 35%, supported by a low interest rate environment. Dominik Sperzel, Head of Trading at Germany's Heraeus Metals, stated that gold prices are influenced by inflation concerns and geopolitical conflicts, and could possibly exceed $3,000 per ounce by 2025.
In the U.S., the election intensity has increased as "Super Tuesday" on November 5th approaches. President Biden's comment referring to Trump supporters as "trash" sparked public outcry, negatively impacting the campaign of his vice-presidential candidate Harris. Although Biden quickly clarified his statement, the negative effect on his supporters was inevitable. On the Republican side, former President Trump held a large rally at Madison Square Garden in New York, using the controversy to sway voters and exacerbating the instability in U.S. politics. Analysts point out that the volatility in U.S. politics continues to provide upward momentum for gold, with prices likely to rise through the end of the year.
Meanwhile, the situation in the Middle East also attracted market attention. The UK-based "Middle East Eye" reported that Hamas rejected a ceasefire proposal mediated by Qatar, Egypt, and the U.S., demanding that Israel withdraw from the Gaza Strip. Hamas insists that any ceasefire agreement must be predicated on Israel's withdrawal, and the current deadlock further increases the allure of safe-haven assets.
From a technical perspective, gold continues to maintain an upward trend. If it breaks through the $2,800 threshold, the next psychological target is at $2,850, while support levels lie at $2,750 and $2,700 in case of a fallback. Valencia analysis points out that the continuous rise in gold prices is driven by a bullish signal from the Relative Strength Index (RSI), indicating strong buyer sentiment. Should gold remain high in the coming days, the market is expected to witness another round of increases.
On the Federal Reserve front, the market anticipates another 25 basis point interest rate cut next week, with investors focusing on the forthcoming Personal Consumption Expenditure (PCE) and non-farm employment data. Third-quarter data shows robust U.S. economic growth, with an annualized GDP growth rate of 2.8% and consumer spending increasing by 3.7%. Additionally, October's ADP employment data showed new jobs surpassing expectations at 233,000, further demonstrating economic resilience. Despite this, geopolitical and inflation risks are high, keeping investor's safe-haven sentiment elevated, with gold seen as the preferred asset to navigate these uncertainties.
