Fed Near Neutral Signals Caution Ahead, Shifting Focus to Fixed Income in 2026 
Gold trades higher on safe-haven demand. It hits a high of $2757 at the time of writing and now sitting around $2,750.47.
The conflict in the Middle East has grown serious, especially with fighting in Gaza and between Israel and Hezbollah. Israel has been conducting heavy airstrikes in Lebanon, responding to Hezbollah's rocket attacks, which have caused many casualties and displacements. In retaliation, Hezbollah has increased its missile strikes into Israel but is careful to avoid a full war. The situation worsened when Iran fired nearly 200 missiles at Israel, which may escalate regional tensions further. Overall, the conflict involves multiple players and poses risks of a larger war.
Uncertainty about the upcoming U.S. presidential election on November 5, 2024, is causing global market worries and increasing demand for safe investments. Concerns over political instability and possible unrest might affect U.S. domestic and foreign policies, especially in the Middle East. Investors are turning to safe-haven assets like gold and U.S. Treasury bonds due to fears of market ups and downs. This shift is leading to changes in financial markets as people avoid riskier investments. Overall, the election's uncertainty is creating challenges for both investors and policymakers.
According to the CME Fed watch tool, the probability of a 25 bpbs rate cut increased to 94.8% from 92.5% a week ago.
Technical Overview:
Gold remains above both short-term and long-term moving averages on the 4-hour chart. The immediate support level is around $2,732; a fall below this could lead to targets of $2720/$2700/$2,685, $2,670, $2,660, or even $2,638. A bearish trend would only be confirmed if prices drop below $2,470. On the upper side, minor resistance is found at $2,760, and breaking past this barrier could push prices up to $2,775/$2800.
Current market indicators present mixed signals: the Commodity Channel Index (CCI) indicates a bullish trend, while the Average Directional Movement Index (ADX) suggests a neutral outlook.
Trading Strategy:
Consider making purchases on dips around the 2,700 mark, with a stop-loss positioned around 2,670 and a target price of $2,759.
