Gold price remains stable near all-time high below $2,800 ahead of US PCE price index

The gold price continues to attract inflows to havens amid political unrest in the US and unrest in the Middle East.
A further augment in the yield of American bonds revives demand in USD and limits the prices of precious metals.
Traders now expect a significant impulse for the release of the US PCE price index.

The price of gold (XAU/USD) is trading in a tight range during Thursday’s Asian session, consolidating its recent powerful gains to a record high. The US dollar (USD) is attracting some decline and appears to have halted its corrective decline from a three-month high for now amid expectations of a slower path in interest rate cuts from the Federal Reserve (Fed), boosted by solid economic data. This, coupled with concerns about the growing U.S. budget deficit, continues to push up U.S. Treasury yields and limit the unprofitable yellow metal’s advantage from modest overbought on the daily chart.

Traders also seem reluctant to place recent bullish bets around the gold price, preferring to wait for the release of the US Personal Consumption Expenditures (PCE) price index. Additionally, Friday’s closely watched U.S. Nonfarm Payrolls (NFP) report will be analyzed for clues about the Fed’s interest rate outlook, which in turn will fuel demand for the precious metal. Meanwhile, any significant corrective moves for the XAU/USD pair appear elusive amid continued safe-haven demand amid US political uncertainty ahead of the November 5 presidential election and tensions in the Middle East.

Daily Digest Market Changes: Gold price remains supported by US political uncertainty and geopolitical risks

On Wednesday, Automatic Data Processing (ADP) magazine reported that private sector employers created 233,000 jobs in October. recent job positions compared to the previous month’s upwardly revised reading of 159,000. and a better-than-expected consensus.
The data point to a resilient labor market, which, together with a range of upbeat data recently released in the US, suggests the economy remains on powerful footing and supports the prospects for less aggressive monetary easing by the Federal Reserve.
Moreover, preliminary estimates from the U.S. Bureau of Economic Analysis suggested that the world’s largest economy expanded at an annualized rate of 2.8% in the third quarter, slower than the 3% growth recorded in the April-June period.
Markets continue to price in a regular 25 basis point rate cut by the Fed in November, which, combined with concerns about deficit spending after the US election, continues to push US Treasury yields higher on Thursday.
The yield on the benchmark 10-year US government bond remains just below 4.3%, near its highest level since July, which is helping to revive demand for the US dollar and weighing on the gold price in a slightly overbought environment.
Thursday’s publication of the US personal consumption expenditure (PCE) price index may influence the path of Fed interest rate cuts and stimulate demand in USD, which in turn should provide a significant impulse for this commodity.
Uncertainty surrounding next week’s U.S. presidential election and rising geopolitical tensions in the Middle East suggest the path of least resistance for the safe-haven precious metal remains positive.

Technical Outlook: Gold price bulls may take a rest near the ascending channel resistance around $2,800

From a technical perspective, there has been a recent uptrend along an upward-sloping channel from the August monthly swing lows to an established near-term uptrend. That said, the relative strength indicator (RSI) on the daily chart is already flashing ahead of overbought conditions. Therefore, any further upward move will most likely remain restricted near the $2,800 level. The mentioned high represents the upper boundary of the channel, which, if broken decisively, will be seen as a recent stimulus for the bulls and will set the stage for an extension of the appreciation movement.

On the other hand, any significant corrective decline currently appears to be finding decent support near the $2,750-$2,748 region or trade resistance breakout point. Some follow-on selling could make the gold price vulnerable to further declines towards intermediate support at $2,732-2,730 on the way to the $2,715 area. This is followed by the $2,700 mark which, if broken, should pave the way for a decline towards the next appropriate support near the $2,675 zone on the way to the $2,657-$2,655 region.