Gold Lower on Friday
Gold prices have come under pressure through the back of the week with the futures market pulling back from the record highs set earlier in the week. The market is now trading back below the 2,427.54 level after printing fresh highs on Wednesday. The shift comes amidst a fresh uptick in USD. The greenback saw better demand through the middle of the week despite increasingly dovish Fed expectations.
US Elections Impact
The prospect of Trump gaining office in the US is becoming a bigger theme for markets as chatter swirls around the need for Biden to step down from the campaign. Fears of heightened geopolitical uncertainty in the event of a fresh Trump presidency are driving safe-haven demand back towards USD for now despite expectations of forthcoming Fed rate cuts through Q3 and Q4.
Trump In Focus
Given that we are seeing USD rallying despite increased expectations of a September rate cut from the Fed, the Trump issue is clearly taking centre stage for now. As such, all incoming news about the election campaign hold the potential to drive markets. Any news supporting the narrative of a forthcoming Trump presidency is likely to exacerbate risk aversion, driving strength into USD while capping upside in gold.
Technical Views
Gold
The rally in gold has seen the market breaking out above the 2,427.54 level and above the bull channel highs. Price is now retesting the level from above. If bulls can defend this zone, focus remains on a continuation higher. Should we break back below, 2,364.93 will be the next support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.