Gold Prices Set for Volatility Next Week Amid US Election and Fed Decision, Say Experts
The country's price for gold increased 32% from last year amid the geopolitical tension, a stable dollar, and an overwhelming demand by the world's top central banks for these metals. But for those two events alone, there is much volatility set for early next week, in particular: the United States will hold elections on November 5, and the Federal Open Market Committee will release its policy on November 6.
It will continue to be bullish for the medium term due to consistent geopolitical uncertainty and prospects of Fed interest rate cuts. In the short term, there will be an American election and a Fed policy statement that will affect gold price as market analysts anticipate the change in investor mood.
Gold Price Forecast for the Next Week
There will be extreme volatility of gold next week, as asserted by analysts. Markets had already factored in an interest rate cut by quarter of a percent by the US Fed on the grounds of weak economic indicators-such as the rise of only 12,000 jobs in the non-farm payroll. Thus if the Fed's action satisfies the expectations, the subsequent movement in gold will hardly be significant. Yet its price direction in the forthcoming days will be heavily swayed by the US poll outcome.
According to FxPro Chief Market Analyst Alex Kuptsikevich, gold moved higher for the fourth successive week. Prices of futures stand above $2800 for troy ounce, the spot is approaching the stated level, making it by 50% since last October. Technical factors for the yellow metal are indicating its correction since RSI breaks the mark of 80 which Kuptsikevich noticed. Historically, this level has led to price corrections of 5-20% although strong uptrends can still continue due to short-covering rallies.
It has been a month of record highs for gold, and selling pressure has come in," said Rahul Kalantri, commodity VP at Mehta Equities. "With the US election on Tuesday, the Fed meeting on Wednesday, and the Bank of Japan on Thursday, it's natural for traders to take profits," he said. Despite that, the market is still in a "buy-on-dips" mode, driven by uncertainties over geopolitical tensions and the outcome of the election, he said.
Critical Gold Price Levels for Next Week
Experts have set the critical levels of support and resistance on gold for the next week. On MCX, gold has a support near ₹77,840 while resistance is placed at ₹79,350 to ₹79,790. For the Comex market, its key support lies at $2,705 while its resistance is close to $2,795.
According to Jateen Trivedi, VP at LKP Securities, "MCX Gold faces strong resistance at ₹79,600, while on the Comex, resistance is set around $2,790." These levels may act as turning points for the traders as they trade with the gold price trend that comes with election and Fed updates.
Investors will be watching closely for events that occur during the week ahead; therefore, gold will experience extreme volatility, offering some long-term opportunitiesto long-term buyers but being a central point of attraction for traders looking to make short-term gains.
