As of October 21, gold prices have reached a new all-time high,, breaking the $2,700 mark for the first time and closing at $2,720 per ounce. Several recent factors have driven this surge, including rising geopolitical tensions, such as escalating conflicts in the Middle East and uncertainties surrounding the U.S. election. Additionally, the continued loose monetary policies have played a role, particularly after the European Central Bank cut interest rates, leading to a 91% market expectation that the U.S. Federal Reserve will follow suit. Mixed U.S. economic data has also added to market uncertainty. The upcoming U.S. presidential election, with closely contested candidates from both parties, has further increased market volatility, boosting demand for gold as a traditional safe-haven asset.

It's also worth nothing that, since the dollar rebounded from its low point on October 1, it has now reached a key neckline level. However, despite the dollar’s relative strength, gold has continued its upward trend, demonstrating strong buying interest, with each price dip attracting more investors. As long as short-term factors driving the demand for safe-haven assets remain and the Fed maintains a dovish stance on interest rates, I believe gold’s upward trend will continue.

From a technical analysis perspective, gold has shown strong upward momentum recently. The daily chart clearly illustrates that, since rebounding from the key psychological level of $2,600, gold has maintained a strong upward trajectory, reflecting robust market demand.

On the support side, investors should closely watch a few key levels. The first is $2,680, which marks the breakout point from a previous consolidation phase and forms a significant technical support. Additionally, the round-number levels of $2,600 and $2,700 should not be overlooked, as they often provide strong support during price pullbacks. If gold prices retreat, these levels will serve as key defensive positions. On the upside, the next target range is $2,760 to $2,800. If gold successfully breaks through this range, it could open the door for further gains, potentially reaching $3,000. However, at such high levels, it’s important to remain cautious and protect against the risk of significant pullbacks.

Hugo Leong

Gold Analyst of Hantec Group