Gold price continues to rally above $2,700, bulls maintain control near all-time high

The price of gold increases in value for the fourth day in a row and jumps to a up-to-date, historic high.
Major central banks remain in interest rate cutting mode and continue to benefit from the interest-free XAU/USD pair.
Tensions in the Middle East and political uncertainty in the US provide additional momentum for this stock.

The price of gold (XAU/USD) rises for the fourth consecutive day – also marking the sixth day of positive movement out of the previous seven – and breaks above the $2,700 level, reaching a up-to-date high during Friday’s Asian session. Expected interest rate cuts by major central banks, as well as tensions in the Middle East and uncertainty around the US presidential elections are proving to be key factors supporting the precious metal.

Meanwhile, positive US data released on Thursday confirmed expectations that the Federal Reserve (Fed) will make moderate interest rate cuts. This was the main reason for the recent rise in the US dollar (USD), which reached its highest level since early August. However, the negative factor does little to dampen the underlying robust bullish sentiment around the gold price, which remains on track to post robust weekly gains.

Daily Digest Market Changes: Gold Price Gains on Geopolitical Risks, Interest Rate Cut Bets and U.S. Political Uncertainty

The European Central Bank on Thursday decided to cut interest rates for the third time this year – marking the first rate cut in 13 years – and expects further cuts as the economic outlook deteriorates.
The Federal Reserve is also expected to further reduce borrowing costs after cutting interest rates in September, while delicate UK inflation data reinforced forecasts for more aggressive monetary easing by the Bank of England.
Meanwhile, the close race between Donald Trump and Kamala Harris adds a layer of uncertainty, which, combined with the risk of further escalation of conflicts in the Middle East, is pushing the price of gold to a up-to-date record high.
The Israeli military confirmed that Hamas leader Yahya Sinwar was killed Wednesday in a “year-long pursuit,” as Iran-backed Hezbollah announced a up-to-date, escalating phase of its war with Israel.
Data released Thursday by the U.S. Census Bureau showed retail sales rose 0.4% in September, beating market expectations for a 0.3% monthly gain and a 0.1% gain recorded the previous month.
In turn, the United States Department of Labor reported that the number of applications for unemployment benefits, after reaching the highest level in over a year, dropped to 241,000 in the week ending October 12. compared to the expected 260 thousand
Moreover, the Philadelphia Federal Reserve’s Manufacturing Sector Survey showed the business conditions index rose from 1.7 to 10.3 in October, well above consensus estimates.
The data suggests that the economy remains on solid footing and confirmed assumptions about a less aggressive easing of Fed policy, pushing up US bond yields and the US dollar, although they do little to reduce demand for XAU/USD.
Meanwhile, markets are reacting little to the latest Chinese macro data, which showed that the world’s second-largest economy expanded by 0.9% in the third quarter of 2024, while the annual growth rate was 4.6%.
Traders are now looking at U.S. housing market data – building permits and home construction starts – and Fed Governor Christopher Waller’s scheduled speech on the last day of the week to capitalize on short-term opportunities.

Technical Outlook: Gold price finds acceptance above $2,700, technical setup offers prospects for further gains

From a technical perspective, a sustained move above the $2,700 level follows this week’s break above the $2,670-2,672 supply zone and could be seen as a up-to-date boost for bullish traders. This, combined with the fact that the oscillators on the daily chart remain in positive territory and are still outside the overbought zone, suggests that the path of least resistance for the gold price is up.

On the other hand, any significant corrective decline now appears to be finding decent support near the $2,662-$2,660 horizontal zone ahead of the $2,647-$2,646 area. A convincing break below the latter could prompt technical selling and drag the gold price to the intermediate support level of $2,630 on the way to the $2,600 area. The latter should now act as a robust base for XAU/USD and a key turning point for short-term traders.