Global Central Banks Accelerate Interest Rate Cuts, Boost Gold's Attractiveness Amid Geopolitical Tensions
Central banks around the world are accelerating interest rate cuts in response to the economic slowdown, weakening currencies and making gold more attractive as a safe-haven asset.
At the same time, both the value of the US dollar and gold continued to strengthen, driven by investors' demand for safe-haven assets following heightened uncertainty ahead of the US presidential election.
Geopolitical tensions, particularly between Iran and Israel, also supported sentiment for gold, as did discussions during the BRICS Summit this week on 'de-dollarization' efforts, a potential move to reduce the use of the US dollar in global trade.
This uncertain geopolitical landscape, along with market uncertainty, has put gold traders on alert, the upcoming "U.S Housing" data and statements from Federal Reserve officials (Fedspeak) are expected to give the precious metal a new direction.
Technical Analysis of Gold Price
From a technical point of view, the price of gold is now approaching a critical resistance level at around $2,760. If gold reaches this level by the middle of this week, a "correction" phase may occur due to "profit taking".
Nevertheless, overall consumer patterns suggest that this may be just a temporary lull before the next upward move, especially if geopolitical tensions continue to rise.
In such a scenario, any short-term decline is unlikely to happen, as market players continue to prioritize gold's status as a safe-haven asset over technical corrections.
As central banks implement more aggressive monetary policy easing and global risks remain high, gold is expected to continue to be the main focus, with traders closely scrutinizing macroeconomic indicators as well as geopolitical developments to determine the next direction for the precious metal.
