The US presidential election continues to dominate the gold price, which is flatlining over the $2,730 mark

Gold prices (XAU/USD) have attracted some buying interest after briefly dipping to a one-week low on Tuesday, currently trading near the $2,735 level, largely steady as the European session approaches. Safe-haven demand, driven by the tight race in the US presidential election and concerns over escalating geopolitical tensions in the Middle East, provides some underlying support to the precious metal.

At the same time, the fading momentum of the "Trump trade" and expectations that the Federal Reserve may cut interest rates further due to signs of a cooling US labor market are pushing US Treasury yields lower. This, in turn, limits the US Dollar's recovery from a two-week low, offering additional support for Gold, which does not yield interest.

Technical Outlook: Gold’s Price May Face Resistance After Last Week’s Rejection at Channel Top
From a technical standpoint, last week's failure near the top edge of an ascending channel starting from late July, followed by a pullback from record highs, could signal fading bullish momentum. However, mixed indicators on the daily chart advise caution against overly bearish bets. Any further decline may find support around the $2,720-$2,715 area, with stronger support near the ascending channel’s lower boundary, currently around $2,690. A sustained drop below this level could signal a potential bearish breakout, possibly leading to a deeper correction.

Conversely, immediate resistance lies around the $2,748-$2,750 region, followed by the recent record high near $2,790. Beyond this, the $2,800 psychological level and the channel’s upper boundary around $2,820 are key targets. A decisive break above these levels could renew the bullish trend, allowing Gold to extend its upward momentum.

Paraphrasing text from "FX Street" all rights reserved by the original author.