Gold Volatility Increases As We Approach US Elections

Gold has been extremely volatile this year, increasing around 40% from the opening price at $2,000 in January and the price action remains so as US presidential elections approach. Both sides are at risk in either scenario, with a status quo from the Democrats easing the uncertainty which could be followed by a correction lower, while a Republican win could send it further, most likely alongside the USD, as we have seen in October.

Election-Driven Surge in Gold Prices

Gold prices soared to a new high of $2,790 last week, primarily due to heightened anticipation surrounding the upcoming US presidential election. Earlier, steady buying pressure, supported by technical indicators such as the 50 SMA (yellow) on the H4 chart, helped maintain gold’s strength throughout the year. However, a decline in September unemployment claims and stronger-than-expected PCE inflation data led to a significant drop in gold prices by the week’s end, with gold briefly falling below the 50 SMA on Thursday for the first time in three weeks.

Record-Breaking Trading Volume

This surge in gold prices was accompanied by an increase in trading volume, with the Korea Gold Exchange reporting that the January–October trading volume reached 1.96 trillion won ($1.42 billion), already surpassing the same period last year’s total of 1.13 trillion won. Despite gold dropping $60 from its peak to $2,731 as it entered oversold territory, prices found support and began to recover.

Gold Chart H4 – The 50 SMA Turned into Resistance

Gold Live Chart