Bearish Break in Gold Price Triangle as XAU Heads to $2,600

The Gold price has been trading in a triangle since late September, with falling highs and higher lows, but it broke to the downside today, as the price fell to the lowest level since September 20 and heads toward $2,600. This looks more like a broad bullish move in the USD, as the Buck is gaining across the board as the stronger US employment data have slowed the FED rate cut process, climbing against safe havens and risk assets as well, while truce calls in the Middle East are hurting Gold and Silver today.

The demand for gold as a safe-haven asset has been driven by a range of political, geopolitical, and economic concerns this year. Factors such as the upcoming U.S. presidential elections, as well as rising tensions in the Middle East, are adding to risk aversion. After GOLD reached a peak of $2,685.69 on September 26, prices have consolidated within a triangle pattern, indicating buyer fatigue and a pause in momentum.

Gold Chart H4 – Breaking Below the 100 SMA

Geopolitical Pressures and Economic Concerns

Gold prices are currently under pressure due to several factors:

• Middle East Tensions: Heightened geopolitical risks, including calls for ceasefires and diplomatic visits, have eased tensions and reduced the need for safe-haven assets.
• U.S. Federal Reserve Policy: Evolving expectations regarding Fed policy are impacting market sentiment. Reduced anticipation of robust policy support has lessened gold’s appeal.
• Economic Uncertainty from China: Following last week’s break, the absence of new economic stimulus from the Chinese government has disappointed markets, with some analysts expecting more robust support.

Impact of Crude Oil and Regional Developments

WTI crude has dropped by $5 to $3,694.77, influenced by easing tensions in the Middle East:

• Lebanon’s Calls for Ceasefire: Lebanon, Iran’s ally, has supported calls for a ceasefire with Israel, potentially signaling a move toward de-escalation.
• Iran-Saudi Arabia Relations: Iranian officials’ recent visit to Saudi Arabia, an Israeli ally, hints at further diplomatic shifts, contributing to lower demand for safe-haven assets.
• Israel’s Stance: Israel has scaled back its threats against Iran, focusing on intelligence targets, which also alleviates geopolitical concerns.

These developments collectively suggest a reduced demand for gold as a hedge, with markets watching for further shifts in global tensions. Today, all precious metals are down. Spot silver dropped 5.2% to $30.10 an ounce. Palladium dropped 3.4% to $1,002 while platinum slid 2.6% to $952.

Gold Live Chart