XAU/USD Current Price: $2,744.80

• The presidential election in the United States is raising concerns about the future of interest rates.
• U.S. Treasury yields extend weekly gains as the trend toward safety continues.
• XAU/USD continues to make higher highs, bulls are in full control of the pair.

Gold prices remained at record levels on Tuesday, with XAU/USD trading as high as $2,745.01 during American trading hours. The shiny metal maintains its positive tone despite the gloomy market sentiment amid tensions in the Middle East and the upcoming US elections.

Speculative interest began to price in a slower pace of Federal Reserve (Fed) interest rate cuts amid fears that former President Donald Trump could win the presidential race. Trump’s tax and tariff policies are seen as potentially driving inflation and even increasing the likelihood of interest rate hikes. Treasury yields continued their rise, with the yield on the 10-year Treasury note currently at 4.20%, its highest level since late July. The 2-year bond is currently offering 4.05%, also a new multi-week high.

Meanwhile, equity markets are in retreat mode, with most Asian and European indices closing in the red. Trading on Wall Street is mixed, with the Dow Jones Industrial Average posting steep losses and only the Nasdaq Composite trading in the green.

Short-term technical outlook for XAU/USD

The risk-off environment suggests the precious metal will continue to post higher highs with no signs of bullish exhaustion, although technical data suggests overbought conditions.

From a technical perspective, XAU/USD is poised to extend its rise. The daily chart shows the pair trading a handful of cents below its daily high, with technical indicators making new highs as they head north. Meanwhile, the shiny metal is well above the bullish moving averages, with the 20 Simple Moving Average (SMA) currently at around $2,668, well above the longer ones.

The short-term picture points to an upward expansion. On the 4-hour chart, technical indicators continued their advances and maintained their bullish trend, with the RSI indicator trending north despite being in overbought territory. At the same time, the pair is trending above the bullish moving averages, with the 20 Simple Moving Average (SMA) currently at around $2,718.

Support Levels: 2,716.40 2,700.00 2,685.45

Resistance levels: 2,740.00 2,755.00 2,770.00