Gold has shown remarkable stability in recent trading sessions, gaining over 5.0% since the beginning of last week. This recovery has been sustained despite major economic and political events, including the U.S. midterm elections, a sharp selloff in U.S. equities, and the release of the latest Non-Farm Payrolls (NFP) report. The metal's resilience suggests it may be regaining its appeal as a safe-haven asset amid rising market uncertainty.
The U.S. midterm elections delivered a Democratic victory, reigniting concerns about stricter regulation in sectors like artificial intelligence. This contributed to a wave of selling pressure in U.S. equities and pushed the Fear & Greed Index into extreme fear territory. The NFP report showed 165,000 jobs created in October, reinforcing expectations for a more aggressive Federal Reserve policy into year-end. Despite these developments, gold has maintained stable performance and shown signs of recovering demand, with futures trading volume exceeding 220,000 contracts and Open Interest rising above 400,000 contracts.
The upcoming release of the U.S. Consumer Price Index (CPI) inflation data could be decisive in determining gold's future momentum. Markets expect annual inflation to rise to around 3.9%, up from the previous 3.7%. This report could influence Treasury yields, a key competing market for gold. The recent moderation in the 10-year U.S. Treasury yield below 5.00% has coincided with improved confidence in gold, suggesting that as long as yields ease, gold may continue its recovery.
Technically, gold's bullish momentum is gaining relevance, with the recent recovery reducing seller dominance. The Relative Strength Index (RSI) remains close to the 50 neutral level, and the Moving Average Convergence Divergence (MACD) histogram fluctuates near the 0 neutral line, indicating a balanced market environment. Key levels to watch include $4,200 as a critical resistance, $4,000 as a near-term barrier, and $3,885 as a critical support level.