Spot Gold Prices See Sudden Decline Amid Uncertainty Ahead of U.S. Election
During the Asian market session, spot gold experienced a sudden and sharp decline, briefly falling to $2,724.64 per ounce, hitting an intraday low. According to FXStreet analyst Christian Borjon Valencia, technical analysis of gold indicates potential signs of weakness.
Gold prices closed nearly unchanged on Monday, with investors awaiting the outcome of the U.S. election and focusing on the Federal Reserve's policy meeting later this week. Spot gold increased slightly by 0.02% to $2,736.38 per ounce, after reaching a record high of $2,790.15 per ounce last Thursday.
UBS analyst Giovanni Staunovo commented that the U.S. election would be the primary driver for gold this week, noting that a Federal Reserve rate cut is unlikely to trigger significant volatility, as the market already expects the move.
Valencia suggests that while the trend for gold remains bullish, momentum has weakened, as shown by the Relative Strength Index (RSI) moving lower in bullish territory. With gold closing below the $2,750 mark on Monday, there may be signs of further weakness ahead.
The first key support level for gold is at the October 23 low of $2,708 per ounce. If this level is breached, the next target would be $2,700 per ounce. Should prices fall further, the next support level would be the September 26 high of $2,685 per ounce, followed by the 50-day simple moving average (SMA) of $2,628 per ounce.
On the upside, Valencia highlights that gold buyers need to push prices back above the psychological barrier of $2,750 per ounce to maintain a bullish outlook. If this level is reclaimed, the next target would be the all-time high of $2,790 per ounce.
