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This Morning's Overview

This morning's data set does not include the latest COMEX futures price (GC=F), so traders should use the technical picture and signals from silver to help gauge market sentiment instead. Silver (SI=F) is trading this morning at $50.69, down -0.40% from the previous close of $50.89, with a very narrow daily range between $50.69-50.74, reflecting that the broader precious metals market is in a mild consolidation phase after a continuous decline. For gold, the technical signals point in the same direction: RSI14 stands at 31.8, close to the oversold zone, and the price is trading below both SMA20 at 4,104.72 and SMA50 at 4,280.19. Meanwhile, the overall system signal remains SELL, indicating that selling pressure still outweighs buying pressure in the short term.

Key Drivers

The key factor to watch today is the US Congressional Elections (midterm elections), a High Impact event that could bring volatility to the dollar and safe-haven assets tonight, Thailand time. There's also an interesting news context suggesting Iran and the US are close to reaching a preliminary diplomatic agreement, which, if confirmed, could ease geopolitical risk pressure and somewhat reduce demand for safe-haven assets like gold. On the US economic data front, the ISM Manufacturing PMI for October came in better than expected at 55.5 versus the forecast of 54.5, reflecting a stronger manufacturing sector, which typically supports a stronger dollar and pressures gold prices. Meanwhile, Construction Spending for September came in much weaker than expected at -1.9% versus the forecast of +0.3%, but the market appears to be weighing the AI-related risk-asset sell-off and the strong manufacturing PMI more heavily, leaving the overall fundamental picture still unsupportive for gold in the short term.

Technical View

Based on the available figures, RSI14 at 31.8 indicates that selling pressure remains dominant, but it is starting to approach a zone where a technical rebound could occur. Meanwhile, the moving average structure remains bearish, as SMA20 (4,104.72) sits clearly below SMA50 (4,280.19). The gap between the two lines is about $175, reflecting a medium-term downtrend with no clear reversal signal yet.

Key support zones to watch are 4,050-4,070 and 4,000-4,020, levels below the SMA20. A break below this zone could open the way for continued selling pressure. On the resistance side, zones sit at 4,100-4,115 near SMA20 and 4,280-4,300 near SMA50; if the price can reclaim the first zone significantly, it could be an early signal of a shift in short-term momentum.

Possible Scenarios Today

Upside scenario: If the US midterm election results create more political uncertainty than expected, or if the Iran-US negotiation news reverses into a more tense direction, safe-haven buying could return, supporting a gold recovery to test the 4,100-4,115 resistance zone, especially if RSI14 starts bouncing clearly from the oversold zone.

Downside scenario: If the dollar continues to strengthen on the back of robust economic data like the ISM PMI, and the election results come in line with market expectations without surprises, gold could face continued selling pressure and risk breaking down to test the 4,050-4,070 zone, or even deeper to 4,000-4,020, if the SELL signal remains dominant and RSI fails to bounce.

What to Watch

Tonight at around 22:16 Thailand time, vote counting for the US Congressional Elections (midterm elections) will take place, a High Impact event that could trigger sharp volatility for the dollar and gold in the early hours of Wednesday morning. In addition, in the early morning of Wednesday, 4 Nov, at around 04:45 Thailand time, New Zealand employment data will be released (Employment Change q/q forecast 0.4% versus previous 0.5%) along with the unemployment rate (forecast 5.5% versus previous 5.6%); while this doesn't directly affect gold, it could create volatility across the broader currency market. As a caveat, the prices mentioned in this article are futures reference prices, which are typically about $30-45 higher than the XAU/USD spot price, so they should be used only as a guide for structural analysis, not as exact trading figures. Traders should closely monitor volatility from the election results, as it could quickly shift market direction overnight.