The light of safe-haven shines! Gold hits 2,740, where is the sword next?

Jinshi Data · 10/21 13:51

Gold continued to rise to a record high amid the tense situation in the Middle East and the US presidential election getting closer. Spot gold stood at 2,740 US dollars/ounce, rising more than 0.6% during the day. Spot silver also rose, breaking through $34 per ounce, reaching its highest level since 2012.

In recent months, the price of gold has continued to reach record highs, rising more than 30% this year. In addition to safe-haven demand and US political uncertainty, the central bank's strong purchases and expectations that the Federal Reserve will cut interest rates also contributed to this rise. Lower interest rates are generally seen as beneficial for interest-free gold.

Rhona O'Connell, head of market analysis for Europe, Middle East, Africa and Asia at StoneX, said, “The simple bottom line is that gold thrives amid uncertainty. The medium-term direction of US foreign policy is unclear, increasing tension in the market.”

Meanwhile, fund managers have increased their net long positions in gold, and investors have also increased their gold exchange-traded fund (ETF) holdings in recent trading days. Commonwealth Bank of Australia analyst Vivek Dhar said in a report that the average price of gold futures could rise to $3,000 in the fourth quarter of 2025.

Ole Hansen, head of commodity strategy at Saxo Bank A/S (Saxo Bank A/S), pointed out that “concerns about rising US debt accumulation are increasing,” which will boost gold, and the upward trend in gold prices is also supporting short-term traders' technical purchases.

Ewa Manthey, commodity strategist at ING Bank NV, said, “We believe that the macroeconomic situation, combined with the safe-haven demand brought about by the escalating tension in the Middle East and the ongoing Russian-Ukrainian conflict, will push the price of gold to a new high.” She believes that regardless of the US election results, gold is likely to perform well.

Fxstreet analyst Joaquin Monfort said that gold has shown a steady upward trend in all time frames (short, medium and long term) and is moving towards the next target of $2,750 after breaking through the $2,700 mark.

However, since the Relative Strength Index (RSI) is overbought, it indicates that the risk of a pullback is increasing, so bulls are advised not to increase their holdings. If the RSI closes in the neutral zone, this will be a signal for the bulls to close their positions and shift to shorting, as there is a possibility of a deeper correction in the price of gold. The support level is at the key psychological mark of $2,700 and the September high of $2,685. However, the strong overall upward trend in gold indicates that any correction may be short-lived, after which the broader bullish trend may resume.

As far as silver is concerned, Kinesis Money said in a report that if the price of gold continues to hit new highs, there is little that can stop silver from rising, but any downside could turn the previous resistance level of $32.55 into a new support level.