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• Gold rose around 0.98% and hit $2,720 on Friday as geopolitical tensions and US election concerns drove demand for safe-haven assets.
• Falling US Treasury yields and the weakening US dollar further boosted bullion prices, as the US Dollar Index dropped to 103.45.
• Analysts predicted continued gold gains, with Citi’s Max Layton forecasting that prices could reach $3,000 an ounce within six to 12 months.

Gold prices continued to print record highs after breaching the $2,700 figure amid uncertainty surrounding the US election and tensions in the Middle East. This weighed on US Treasury bond yields and the greenback, which tumbled to a two-day low of 103.45 on Friday after hitting a two-month peak of 103.87. At the time of writing, the XAU/USD currency cross was seen trading at around $2,721, up by approximately 1.09%.

The market mood remained upbeat as Wall Street registered modest gains. In the meantime, geopolitics took center stage after Israel confirmed the death of Hamas leader Yahya Sinwar. Meanwhile, Hezbollah said that it is escalating its confrontation with Israel as US Defense Secretary Austin commented that the death of the Hamas leader could provide an opportunity for a ceasefire.

According to Kann News, US Secretary of State Antony Blinken told Israel’s President Isaac Herzog that he’s expected to arrive in the coming days to discuss a ceasefire deal. Bullion prices extended their gains following Hezbollah’s threat to escalate the conflict. The XAU/USD cross rose sharply above the $2,700 level and reached an all-time high of $2,720.

Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany, commented that, in addition to geopolitics, “Concerns around the U.S. presidential election and anticipation of looser monetary policies have further fueled the rally.”

Major central banks are expected to continue to ease policy. During the week, inflation in the UK in September was higher than the Bank of England’s (BoE) 2% target and came at 1.7% year-over-year, sparking speculation on a BoE rate cut. On Thursday, the European Central Bank (ECB) lowered borrowing costs after inflation dropped to 1.7%, beneath the ECB’s goal.

Consequently, global yields tumbled, which was a tailwind for the non-yielding metal. The US 10-year Treasury note yield fell two basis points (bps) during the day, and it was seen at 4.073% after hitting a weekly high of 4.142%.

Gold has hit multiple all-time highs during the year, and it has moved up by 30% year-to-date. Max Layton, Global Head of Commodities Research at Citi, foresees gold reaching $3,000 an ounce over the next six to 12 months.

Despite that, the Fed is heavily expected to lower interest rates by 25 basis points at the November meeting. Odds remained at 92.9%, according to CME FedWatch Tool data.

Market Movers: Gold Price Climbed, Ignored Upbeat US Data

• US Building Permits in September fell by 2.9%, decreasing from 1.47 million to 1.428 million, missing estimates of 1.46 million.
• Housing Starts for September dipped by -0.6%, from 1.361 million to 1.354 million.
• Data from the Chicago Board of Trade, based on the December fed funds rate futures contract, indicates that investors estimate 48 basis points (bps) of Fed easing by the end of the year.

XAU/USD Technical Outlook: Gold Price Surged Above $2,700, Eyed $2,750 Level

It seems that rally gold prices has remained intact. Momentum appeared to back bulls as depicted by the Relative Strength Index (RSI), which soared and turned overbought, though with no signs of consolidating.

Given this backdrop, the path of least resistance seems to lie upward. Gold’s first resistance would be the $2,750 mark, followed by the $2,800 area.

Conversely, if the XAU/USD duo retreats from record highs below the $2,700 mark, it could pave the way for a pullback. The first support would be the Oct. 17 high at $2,696, followed by the Oct. 4 high at $2,670.

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