Additionally, traders are looking ahead to more monetary easing from major central banks, including the U.S. Federal Reserve, as inflation risks appear to be subsiding. This further strengthens the case for gold, with investors expecting central banks to maintain a loose monetary stance for longer. As a result, spot gold has gained over 31% this year.
Technical Outlook Suggests Possible Resistance at $2,750
From a technical perspective, gold could encounter resistance at $2,750, which marks the upper boundary of the rising trend channel that has been in place since late July, according to Kinesis Money analyst Frank Watson. While gold is benefiting from high conviction trades and strong investor sentiment, there is a risk of consolidation or profit-taking at these levels. Independent analyst Ross Norman remarked, “Gold’s rise has been so powerful that it seems to be ignoring key factors like declining inflation and stable Treasury yields.”
**Insight:** Investors should closely monitor gold’s movement as it approaches the $2,750 resistance level, considering potential profit-taking activities.
U.S. Treasury Yields Steady as Economic Resilience Continues
On the macroeconomic front, U.S. Treasury yields held steady on Friday following strong retail sales data, which rose 0.4% in September, surpassing expectations and reflecting solid consumer spending. Additionally, weekly jobless claims came in lower than forecast, reinforcing the view that the U.S. economy remains resilient. Investors are awaiting further data on housing starts and comments from several Federal Reserve officials for more insights into future monetary policy.
**Insight:** The stable U.S. economy and positive economic indicators are likely to impact gold prices as investors assess the overall market sentiment.
Market Forecast: Bullish Outlook for Gold Amid Geopolitical and Economic Uncertainties
Given the current geopolitical instability and expectations for continued monetary easing, the outlook for gold remains bullish in the short term. Investors are likely to continue seeking refuge in gold as risk aversion remains high. While the potential for resistance at $2,750 exists, the overall trend remains upward, supported by both fundamental and technical factors. Any further escalation in Middle East tensions or signals of prolonged central bank easing could push gold prices higher, with the next key target being $2,750.
**Insight:** Geopolitical tensions and economic uncertainties play a significant role in shaping the bullish outlook for gold, emphasizing the importance of keeping an eye on global developments that could impact the market.
