Gold Sky-rocket with the U.S. Election Jitters

• Gold Prices surged to an all-time high as the market braced for the U.S. election.

• Nasdaq jumped on the back of strong Alphabet Inc earning performance, eye on Meta and Microsoft earning reports today.

• BTC reached above the $73000 mark with strong ETF in-flow.

Market Summary

Gold surged to an all-time high in the last trading session, climbing above the $2,780 mark. Multiple bullish factors have fueled this rally, including intensifying geopolitical tensions in the Middle East and Eastern Europe, which have heightened demand for safe-haven assets. Additionally, as markets brace for the U.S. election, investors are showing a strong preference for gold as a hedge against uncertainty.

On Wall Street, Alphabet Inc.s impressive earnings report lifted the Nasdaq to a recent high, while earnings from Meta Platforms and Microsoft Inc., due today, are expected to introduce volatility in the market.

In the forex market, Australias CPI reading came in at 2.8%, meeting market expectations but falling 1% from the previous reading. This decline suggests that inflationary pressures in Australia may be easing, potentially leading the Reserve Bank of Australia to consider more accommodative policy measures, which could weigh on the Australian dollar.

Meanwhile, Bitcoin (BTC) touched its highest level since March, driven by optimistic sentiment in the crypto market ahead of the U.S. presidential election. This momentum potentially propels BTC toward the $80,000 mark in the near term.

Current rate hike bets on 7th November Fed interest rate decision:

Source: CME Fedwatch Tool

-50 bps (7%) VS -25 bps (97%)

Market Movements

DOLLAR_INDX, H4

The Dollar Index retreated slightly following weaker-than-expected JOLTs job openings data, which fell to 7.443 million, missing the expected 7.980 million and marking the lowest level since January 2021. This data points to potential softening in the U.S. labor market, leading investors to adopt a cautious stance as they await additional economic indicators, including the Nonfarm Payrolls, Core PCE Price Index, and GDP releases later this week. With a data-dependent environment unfolding, traders are encouraged to monitor these releases closely for clearer signals on the dollar's trajectory.

The Dollar Index is trading lower while currently near the support level. MACD has illustrated increasing bearish momentum, while RSI is at 49, suggesting the index might extend its losses after breakout since the RSI retreated sharply from overbought territory.

Resistance level: 104.95, 105.55

Support level: 103.95, 103.20

XAU/USD, H4

Gold prices surged to fresh record highs, supported by weaker U.S. economic data and growing uncertainties as the 2024 U.S. Presidential election approaches. Recent polling data shows a close race between Donald Trump and Kamala Harris, though prediction markets indicate a lead for Trump, fueling concerns about the U.S. debt outlook and boosting safe-haven appeal. The downturn in U.S. job openings further weighed on economic sentiment, shifting investors toward gold as a safer asset amidst potential economic instability.

Gold prices are trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 73, suggesting the commodity might enter overbought territory.

Resistance level: 2775.00, 2795.00

Support level: 2755.00, 2720.00

Nasdaq, H4

The Nasdaq hit record highs on Tuesday as the technology sector gained momentum in anticipation of key earnings releases from several major players, including Alphabet, Meta Platforms, Microsoft, Apple, and Amazon. With these “Magnificent Seven” firms representing substantial market capitalization, their earnings are set to serve as a benchmark for broader market performance. Investors will closely assess whether these firms have capitalised on their AI investments, a focal point in recent quarters, to maintain their growth trajectory.

Nasdaq is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 63, suggesting the index might extend its gains after breakout since the RSI stays above the midline.

Resistance level: 20575.00, 21075.00

Support level: 19705.00, 19120.00