Gold Price Forecast: U.S. Election Uncertainty and Fed Rate Decision Fuel $2,736 Surge

“Gold is performing well in anticipation of inflationary pressures that may accompany a Trump win, especially given his pro-tariff stance,” said Bart Melek, head of commodity strategies at TD Securities.

Analysts agree that gold’s appeal as a hedge against political and economic turbulence remains strong, particularly when inflation risks are on the rise.

Federal Reserve’s Upcoming Rate Decision

Adding to the momentum behind gold, the Federal Reserve’s upcoming interest rate decision on Thursday has captured market attention. Investors widely expect a quarter-point rate cut, a move that would make holding non-yielding assets like gold more attractive. Gold typically thrives in low-interest environments as the opportunity cost of holding it decreases.

According to UBS analyst Giovanni Staunovo, “While the election may set the tone, the Fed’s rate cut decision will play a critical role in shaping gold’s trajectory.

However, the cut itself may not cause significant price shifts if the Fed signals more gradual reductions in the future.” Staunovo’s sentiment reflects broader market expectations that the Fed will align future cuts with market forecasts, avoiding any surprises.

Technical Analysis: Key Levels to Watch

Gold’s technical landscape also supports a potential bullish trend. Currently trading around $2,736, the price has formed a hammer candlestick on the 2-hour chart, a bullish signal typically indicating possible upward momentum.

Immediate resistance lies at $2,747, near the 50-day Exponential Moving Average (EMA), which could prove a key barrier to further gains.

• Resistance Levels: Immediate at $2,747 (50-day EMA), followed by $2,757 and $2,769.

• Support Levels: Initial support at $2,727, with additional support at $2,717 and $2,708.

• Technical Indicators: RSI near 40, suggesting a neutral trend with a slight bullish tilt.

A decisive move above $2,747 could prompt bullish momentum, potentially pushing gold toward the $2,757 and $2,769 levels. Conversely, failure to maintain support at $2,727 could invite selling pressure, with a focus on lower support levels.

The RSI at 40 reflects neutral sentiment, but a break above resistance could attract renewed buying interest, particularly amid political and economic uncertainties.