Gold hits record levels ahead of employment data releases

Gold prices remain positive and supported by strong market momentum. The US Dollar Index (DXY) remains stable amid US election uncertainty. Key economic data, like the JOLTS Job Openings report, will be crucial for investors. A slight dip in job openings could suggest a slowing labor market, easing inflation concerns. Currently, the US dollar fluctuates at a higher level and shows strength.

The upcoming GDP and consumer confidence data will also impact gold’s short-term direction. Moreover, the Q3 GDP growth is expected at 3%, with the Atlanta Fed estimating a possible increase to 3.3%. This economic strength may prevent sharp dollar declines. However, the December Fed interest rates indicate a potential 49 basis points cut, which could benefit gold. A lot of this depends on the outcome of the US election. With these economic factors in play, gold demand could remain high, especially if Fed easing continues or economic growth slows. This setup may reinforce gold’s position as a strategic asset for investors.

New record levels in Gold

The gold price has been moving within an ascending channel for the past three months and is currently trading above the midline of this channel. This channel is shown in the 4-hour chart below. Last Friday's weekly solid close has set the stage for potential price gains this week. However, the market remains tense as it approaches another test of the $2,780 resistance level. This resistance is aligned with the channel’s resistance line. The robust uptrend reflects the significant price movements influenced by the ongoing geopolitical crisis in the Middle East. As these crises escalate on a large scale, prices may gain further traction based on regional developments.

How to trade Gold during geopolitical crisis?

Trading during geopolitical crises has been extremely challenging, as prices remain highly volatile. However, when risks emerge in other assets, investment focus shifts to gold and silver markets. As a result, gold benefits as the crisis escalates. The chart below illustrates gold trade entries sent to Gold Predictors members, showcasing an approach to trading during crises. Traders should buy on dips when technical factors align with upcoming news. The chart shows that gold prices bottomed precisely at the entry level when we sent a trade alert to members. This level of accuracy is achievable when technical and fundamental factors converge to generate signals.

The market is displaying positive momentum, and this week’s NFP report may push prices to the next level. The consolidation at the resistance level further enhances the positive momentum in gold.

Conclusion

In conclusion, strong market momentum reinforces gold’s position as a strategic asset. The uncertainty surrounding the US election is creating volatility in other markets. However, the US election result will induce strong volatility in gold. The upcoming GDP and consumer confidence data and potential Fed rate cuts suggest continued support for gold, especially if the US economy shows signs of moderation.

Technically, gold’s upward movement within an ascending channel indicates strong support for price gains, with the $2,780 resistance level in sight. Additionally, ongoing geopolitical tensions in the Middle East add to gold’s safe-haven appeal. Traders can capitalize on buying opportunities during market dips, particularly when technical signals align with news events. As momentum builds and NFP data is released, gold prices could reach new highs soon.

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