With the US election fast approaching, traders are expecting to see more movement in the world’s favorite precious metal, especially if uncertainties increase in the run-up to the big day. At the moment, the result is still uncertain, and market participants are likely to turn to gold for a safe-haven return.
Gold is currently sitting just below its all-time high, which it reached in late September, and any dips have been well bought over the last few weeks. Initial support on the daily chart now comes in around the $2,600 level. Traders expecting more uncertainty in the market and increased geopolitical concerns will likely use this level to go long. However, if they do not get the chance to buy the dip, we are not far from seeing traders buy the breakout of both the longer-term trendline resistance around $2,661 or the record high at $2,885.42.
Conversely, those traders who feel more certain about the election result will probably be looking for levels to sell, and the above levels will work equally well.
The next longer-term trendline support level is now around $2,520, and this is expected to be well-supported in the short term, with the trend still firmly pushing the precious metal higher. We also note that the 200-day moving average level is much lower and coincides with the lower trendline support level on this chart, which is probably a solid indication of the market’s direction and is therefore likely to continue unless there is a dramatic turnaround in global underlying fundamentals.
