Gold sees renewed buying interest during US election week: Can XAU avoid deeper losses?

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Gold slides 1.21% to $3,896 today

Highlights

Gold attracted renewed buying interest at the start of US mid-term election week due to increased political uncertainty.
Recent US-Iran diplomatic activity pushed oil prices lower, providing only limited support as gold posted a new yearly low and ended October sharply lower.
Gold trades below key moving averages and momentum indicators show sellers hold control, projecting a 71% likelihood of a move to the $3,849 to $3,943 range.

Safe-haven flows counteracted by macro drivers and election uncertainty

Gold saw renewed buying interest at the start of United States mid-term election week, as investors responded to perceived safe-haven needs during increased political uncertainty. A decline in oil prices, attributed to U.S.-Iran diplomatic developments, provided modest relief to the metal, though the effect was limited, according to FXStreet. Despite these factors, gold had recently fallen to a new yearly low and ended October sharply lower, underlining persistent selling pressure in the current macroeconomic context.

Downside momentum extends as multiple indicators flag oversold conditions

On the H1 chart, XAU is positioned below its MA-20 at $3,941 and MA-50 at $3,926, continuing to remain under the long-term MA-200 at $4,357. The Kijun level at $3,930 serves as immediate resistance. RSI reads 37.88 and signals sell conditions, while both MACD and ADX are aligned with continued downside momentum. Stochastic RSI, CCI, and Bull/Bear Power indicate the presence of oversold dynamics and strong seller dominance. Price action sits close to the session low, with the Awesome Oscillator neutral and not offering additional conviction.

Range-bound outlook favored as downside risk remains dominant

Over the next one to two trading days, XAU is expected to consolidate within a range of $3,849 to $3,943. There is a 29% probability of a move higher, while downside pressure has a 71% likelihood, making a rebound less probable. The base scenario sees continued range trading, but a clear break above the Kijun resistance would open up a bullish path, while a drop below support could accelerate further declines.

Anton Kharitonov, analyst at Traders Union, sees continued downside risks for gold. Technical signals point to dominant seller momentum and oversold conditions, while recent news flow has failed to trigger a sustained recovery. He believes political events brought only brief safe-haven demand and macroeconomic headwinds remain strong. "Base case remains consolidation below resistance — until gold reclaims $3,930, upside looks limited and sellers are in control."

Earlier, analysts noted that gold was under pressure as investors reduced positions to cover losses elsewhere and as rate hike expectations persisted amid shifting inflation dynamics. The current technical outlook continues to reinforce this bearish scenario, with downside momentum prevailing and traders advised to monitor a potential break below near-term support for increased risk of accelerated declines.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.