Gold (XAU) Daily Forecast: Strong Dollar and Election Uncertainty Weigh on Gold

Market Overview

Gold (XAU/USD) remains under pressure, trading around $2,710. Selling pressure intensified on Wednesday as the U.S. dollar gained strength, driven by early U.S. exit polls showing Republican candidate Donald Trump leading in key swing states.

This dollar strength, combined with a rise in U.S. Treasury yields, has made gold less attractive to investors.

U.S. Dollar Gains on Election Results and Treasury Yield Surge

The U.S. dollar hit its highest level in nearly four months following early election results that indicated a Trump lead in critical states like Georgia and Wisconsin.

The dollar’s bullish momentum was further fueled by rising U.S. Treasury yields, with the 10-year yield jumping 15 basis points to 4.44%, its highest since early July.

“Investors are reacting to expectations of a pro-business stance under Trump and the likelihood of higher deficit spending,” said a financial analyst from IG Markets.

The prospect of increased government spending, coupled with Trump’s inflationary tariffs, has heightened expectations of higher inflation, putting upward pressure on Treasury yields.

This, in turn, reduces the appeal of non-yielding assets like gold, which often serves as a hedge against inflation.

Market Risk-On Sentiment Adds Pressure to Gold Prices

In addition to the stronger dollar and higher yields, a broader “risk-on” sentiment has swept through the markets, further pressuring gold. With the election results lifting uncertainty, investors have shifted towards assets like equities and bonds, reducing demand for safe-haven investments.

“Gold’s struggle to hold above $2,735 highlights the market’s appetite for riskier assets at this point,” commented a senior analyst.

Short-Term Forecast

Gold (XAU/USD) is likely to face continued selling pressure if it stays below $2,725, with immediate support at $2,701 and further downside risks at $2,692 and $2,684.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) recently took a sharp dive, trading at $2,711 after a 1% drop, driven by a strong bearish move that sliced through key levels.

Currently, immediate support is at $2,701, with the next support levels seen at $2,692 and $2,684 if the downward momentum persists. Immediate resistance now lies around $2,725, with further barriers at $2,743 and $2,752.

The 50-day EMA sits at $2,740, while the 200-day EMA at $2,742—both above the current price—reinforce the bearish sentiment.

The substantial sell-off, coupled with a bearish engulfing candle, signals potential for further declines. For now, as long as gold remains under $2,725, sellers appear in control, with limited signs of reversal.