Gold Price Forecast: Near Record High at $2,790 Amid U.S. Election and Inflation Risks
LONDON (October 31) Gold prices have climbed to unprecedented levels, driven by safe-haven demand as the U.S. presidential election intensifies. As of Thursday, gold was trading at $2,783, close to its resistance level at $2,790, as investors prepared for market volatility and potential policy shifts.
The tight race between Republican former President Donald Trump and Democratic Vice President Kamala Harris has heightened demand for gold, traditionally seen as a hedge against economic uncertainty and potential deficit spending.
Kyle Rodda, a financial market analyst at The future of trading , noted, “The rise in gold looks a lot like one of the Trump trades, or effectively a hedge against greater deficit spending in the United States.” Investors remain wary of potential fiscal policy changes and are seeking refuge in gold to mitigate risks in this high-stakes environment.
Inflation Data and Fed Rate Outlook in Focus
Beyond election uncertainties, the market is closely watching the U.S. inflation report for further insight into the Federal Reserve’s monetary policy. The core Personal Consumption Expenditures (PCE) index, scheduled for release later today, is expected to show a 0.3% increase for September, up from August’s 0.1% rise. Analysts predict that if PCE inflation falls below 0.2% month-over-month, it could strengthen the upward momentum in gold prices.
Matt Simpson, senior analyst at City Index, remarked, “Traders want to buy gold whether it rises or falls, and that has kept retracements small and consolidations tight.” Simpson added that a lower-than-expected inflation figure could propel gold further as investors continue to hedge against potential policy shifts.
The U.S. weekly jobless claims and Friday’s non-farm payrolls report are also on the radar. These indicators will offer additional context on the economy’s health and labor market stability. With a 96% chance of a Federal Reserve rate cut expected next week, a low-interest environment could continue to bolster gold’s appeal, as bullion tends to thrive when borrowing costs decline.
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