Gold consolidates near all-time peak, looks to US macro data for fresh impetus

• Gold price continues scaling new all-time peaks amid US election jitters, Middle East woes.
• The momentum seems unaffected by elevated US Treasury bond yields and a bullish USD.
• Traders now look forward to important US macro data before positioning for further gains.

Gold price (XAU/USD) builds on the overnight breakout momentum through a short-term trading range and climbs to a fresh record high during the Asian session on Wednesday. Safe-haven demand stemming from US election jitters and Middle East tensions turn out to be a key factor that benefits the precious metal. Apart from this, a modest pullback in the US Treasury bond yields offers additional support to the commodity.

Meanwhile, expectations for smaller interest rate cuts by the Federal Reserve (Fed), along with deficit-spending concerns after the US election, act as a tailwind for the US bond yields. This, in turn, helps revive the US Dollar (USD) demand and caps gains for the non-yielding Gold price amid slightly overbought conditions on the daily chart. Traders also seem reluctant and prefer to wait for the release of important US macro data. 

Daily Digest Market Movers: Gold price continues to draw support from US political uncertainty and geopolitical risks

• Republican former US President Donald Trump and Democratic Vice President Kamala Harris are caught in a tight race for the White House, fueling political uncertainty and pushing the Gold price to a fresh record high on Wednesday.
• An Israeli strike on a residential building in northern Gaza killed nearly 100 people on Tuesday. This comes days after the Israeli military confirmed on Sunday that the air force had conducted a precise strike targeting Hamas fighters.
• The development raises the risk of a further escalation of tensions in the Middle East and contributes to the bid tone surrounding the safe-haven XAU/USD, offsetting the recent surge in the US Treasury bond yields and the US Dollar. 
• The incoming US macro data suggested that the US economy remains on a strong footing, reaffirming market expectations for a less aggressive policy easing by the Federal Reserve and the prospects for smaller interest rate cuts.
• The Conference Board reported on Tuesday the US Consumer Confidence Index registered its largest single-month gain since March 2021 and rose to a nine-month high of 108.7 in October, from September’s upwardly revised 99.2.
• This reflected optimism in business conditions and the job market, overshadowing the disappointing Job Openings and Labor Turnover Survey, or JOLTS report, which showed that vacancies fell to more than a 3-1/2-year low in September.
• Apart from this, deficit-spending concerns after the November 5 US presidential election keep the US bond yields elevated near a multi-month top, which, however, do little to hinder the precious metal’s follow-through positive move. 
• Traders now look to Wednesday’s US economic docket, featuring the release of the ADP report on private-sector employment and the Advance GDP print, which is expected to show that the economy grew by a 3% annualized pace in Q3.
• The market attention will then shift to the US Personal Consumption Expenditure (PCE) Price Index – the Fed’s preferred inflation gauge – on Thursday and the closely-watched US Nonfarm Payrolls (NFP) report on Friday.

Technical Outlook: Gold price bulls take breather near multi-month ascending trend-line hurdle amid overbought RSI

From a technical perspective, the overnight breakout above a one-week-old trading range was seen as a fresh trigger for bulls. The subsequent move up lifts the Gold price to an ascending trend-line resistance extending from early July, currently pegged near the $2,780-2,785 region, which could now act as a strong barrier amid a slightly overbought Relative Strength Index (RSI) on the daily chart. A sustained strength beyond the said barrier, however, could lift the XAU/USD further towards the $2,800 mark.

On the flip side, any meaningful corrective slide now seems to find decent support near the trading range hurdle breakpoint, around the $2,750 region. Some follow-through selling could make the Gold price vulnerable to extend the fall further towards the $2,732-2,730 intermediate support en route to the $2,715 area. This is followed by the $2,700 mark, which if broken should pave the way for a decline towards the next relevant support near the $2,675 zone en route to the $2,657-2,655 region.