As the United States presidential election approaches, one prevailing area of interest in the financial markets is how gold will react to the outcome.
This is a notable area of focus, especially as the precious metal has rallied to new highs amid speculation on whether the momentum will continue after the polls.
Historical data and technical indicators hint at what to expect for the yellow metal, which aims to breach the $2,800 resistance level.
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Gold prices have soared to a record high of $2,790 per ounce, echoing similar gains in the weeks leading up to the 2020 U.S. election. Now, the metal is eyeing the $2,790 to $3,000 price range as a critical resistance level, with the outcome of the November 5 polls likely to fuel strong price movements, according to GoldPredictors in an X post on November 1.
Notably, gold has entered a significant target range between $2,780 and $3,000, a zone that may either cap or catalyze further price moves.
Chart patterns show the metal continues to exhibit a bullish uptrend, with momentum indicators like the Relative Strength Index (RSI) hovering near overbought levels. This suggests that gold could face resistance in this zone.
At the same time, Fibonacci retracement levels further indicate that $2,850 could act as a short-term ceiling if prices continue to rise, while support levels around $2,700 offer a cushion in case of a pullback.
Impact of elections on gold
According to GoldPredictors, with the U.S. election nearing, the gold market may see increased volatility as investors gravitate toward safe-haven assets amid uncertainty. The platform added that traders watch for breakouts or corrections in the coming weeks as signals for gold’s next move.
Although GoldPredictors’ analysis foresees more volatility for the precious metal after the elections, other dissenting voices see the political outcome as a bullish catalyst.
According to a Finbold report, Goldman Sachs Research commodity strategist Lina Thomas suggested that the post-election uncertainty will likely make gold’s safe-haven attribute more attractive to investors, potentially pushing the commodity to a high of $3,000 by the end of 2025.
Meanwhile, some financial market sections believe that both candidates and their proposed policies are ideal for a gold price rally, regardless of who wins.
For instance, if Donald Trump reclaims the White House, he has signaled plans to implement an aggressive trade policy with substantial tariffs on foreign goods. Such tariffs are a precursor to rising inflation, making gold more appealing.
On the other hand, if Vice President Kamala Harris wins, inflationary pressures will increase, as she is likely to implement policies that prioritize government spending, thereby raising debt levels and further weakening the dollar.
Gold price analysis
After a brief sell-off on October 31, gold made minor gains of less than 0.1%, trading at $2,745 as of press time. The commodity’s immediate target remains to reclaim the $2,750 resistance level.
While investor interest in gold has increased in recent months, commodity trading expert Zafar Shaikh, in an X post in November, noted that after the noise around the metal settles, the next major movement might happen quietly.
He emphasized that the real trend often emerges once the noise fades, noting that gold has become a consensus trade.
In conclusion, as the U.S. election nears, gold’s performance remains a key focal point for investors. With prices hovering near record highs, gold’s path forward is likely to be influenced by the election outcome and subsequent economic policies.
