Gold Price Soar on Geopolitical Tension

Market Summary

Wall Street saw a retracement in the last session, with a similar sentiment spreading to the Asian markets during the Tokyo session。 This sell-off is believed to have been triggered by ASML, the world‘s most advanced chip making machines manufacturer, missing its earnings target, indicating a potential slowdown in the global tech sector. Despite this, the U.S. equity market remains near its all-time highs, and traders are eagerly awaiting mega cap’s earnings reports to gauge future market direction.

Meanwhile, ongoing crossfire in the Middle East has fueled commodity prices, with gold rising steadily to near the $2,670 mark on heightened geopolitical risks. Oil prices, which had shown signs of bearish momentum, are stabilising as traders closely monitor developments in the region.

In the forex market, while the U.S. dollar held steady, attention has shifted to the Pound Sterling, with the UK CPI reading due today. Additionally, tomorrows ECB interest rate decision is anticipated to have a direct impact on the euro. In the crypto market, both BTC and ETH have surged sharply following news that both U.S. presidential candidates explicitly support the crypto sector, driving BTC to its highest level since July.

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

Source: CME Fedwatch Tool

-50 bps (7%) VS -25 bps (93%)

Market Overview

DOLLAR_INDX, H4

The Dollar Index, which measures the dollar against a basket of six major currencies, extended its gains. This movement is driven by investor expectations that recent strong U.S. economic data might prompt the Federal Reserve to implement smaller-than-expected rate cuts. The U.S. economy has shown resilience, with inflation rising slightly more than anticipated in September. While the Fed initiated an easing cycle with a 50-basis-point rate cut in September, market expectations have shifted toward a slower pace of cuts, further strengthening the dollar.

The Dollar Index is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 70, suggesting the index might enter overbought territory.

Resistance level: 103.25, 103.95

Support level: 102.55, 101.65

XAU/USD, H4

Gold prices remained in a consolidation phase near record highs, as investors adopted a cautious stance amid several impending events. Market volatility may stay elevated as the U.S. elections approach, alongside ongoing Middle East tensions. Despite the geopolitical backdrop, the U.S. dollar‘s strength has capped gold’s gains, with recent strong economic reports tempering demand for the safe-haven asset. Investors should continue to watch these developments for potential trading signals.

Gold prices are trading lower following the prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 57, suggesting the commodity might extend its losses since the RSI retreated sharply from overbought territory.

Resistance level: 2670.00, 2690.00

Support level: 2645.00, 2630.00

BTC/USD, H4

Bitcoin (BTC) continues to surge, breaking above its downtrend resistance level and reaching the $67,000 mark for the first time since July. The crypto market has been widely encouraged by a more favourable stance from the U.S. government, as both presidential candidates, Kamala Harris and Donald Trump, have explicitly shown support for the crypto market ecosystem. This political backing has fueled increased buying pressure across the crypto market, boosting investor confidence and driving the price of BTC higher.

BTC has reached its highest level since July, suggesting a bullish bias. The RSI has broken into the overbought zone, while the MACD continues to edge higher, suggesting BTC is currently trading with strong bullish momentum.

Resistance level: 70880.00, 73660.00

Support level: 64700.00, 61200.00

Dow Jones, H4

U.S. equities faced a selloff as concerns over tightening U.S. restrictions on chip sales and a disappointing forecast from Europe‘s most valuable tech company dampened sentiment. Dow Jones declined 0.75% while the Nasdaq 100 fell 1.4%. Semiconductor stocks took a hit, with ASML Holding NV’s U.S.-traded shares plunging 16% after cutting its guidance for 2025. Nvidia Corp. also saw a 4.5% decline following reports that U.S. officials are considering capping sales of advanced AI chips to certain countries.

The Dow is trading lower following the prior retracement from the resistance level. MACD has illustrated diminishing bullish momentum, while RSI is at 60, suggesting the index might extend its losses since the RSI retreated sharply from overbought territory.

Resistance level: 43440.00, 44900.00

Support level: 42420.00, 41400.00