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NASDAQ, Gold Outlook: Record Highs vs Earnings and Elections

Article By: ,  Market Analyst
October 29, 2024 9:54 AM

Key Events to Watch

Earnings Reports:

  • Google (Tuesday)
  • Microsoft (Wednesday)
  • Meta (Wednesday)
  • Apple (Thursday)
  • Amazon (Thursday)

US Economic Indicators:

  • US Advance GDP (Wednesday)
  • US Core PCE (Thursday)
  • US Non-Farm Payrolls (Friday)

Markets on Edge Ahead of US Elections

US indices, particularly the Nasdaq, are hovering near record highs, reflecting both resilience and caution. The tight race between Vice President Harris and former President Trump has heightened market anticipation, as a Trump win is viewed as more financial market friendly. Before the election impact settles in, volatility is expected from key events this week, including earnings from mega-cap tech stocks and Friday’s non-farm payroll report.

Mixed Signals: Nasdaq vs. Gold

For equity markets, especially the Nasdaq, indecision currently dominates, with price action swinging between neutral and bearish. On the other hand, gold is benefiting from heightened uncertainty, with bullish momentum and demand rising as investors seek safe-haven assets.

Both markets are expected to trace irregular volatility with the upcoming economic data on inflation (US Core PCE) and employment (US non-farm payrolls), which could influence the Fed’s monetary policy decision next week following the US elections.

To quantify the uncertainties from a technical perspective:

Nasdaq Outlook: 3 Day Time Frame – Log Scale

Source: Tradingview

Respecting the borders of its primary uptrend since the lows of October 2022, Nasdaq is currently hovering slightly below its all-time high at 20,760, below the respected mid channel zone. A decisive close above the mentioned high can extend Nasdaq’s rally towards new record highs, aligning with potential resistance zones at 21,400 and 21,780 respectively.

From the downside, failing to record a new high can support pullbacks back toward the potential support zones at 19700 and 19400. A break below the 19,000-mark can extend the drop towards the bottom end of the 18,000 range.

Gold Outlook: 3Day Time Frame – Log Scale

Source: Tradingview

Gold’s positive correlation with uncertainty regarding US inflation, the US Dollar, geo-political conflicts, and the outcome of the US election is keeping the trend in line towards the 3,000-mark. However, overbought momentum indicators suggest a pullback could be imminent if a significant fundamental trigger arises.

Beyond the haven rally, gold is expected to face further volatility with non-farm payrolls and US economic growth indicators this week, and possibly keep its bullish ground as long as political headlines remain heated and uncertain.

A decisive close above 2760 is still expected to extend the bull track towards the potential resistance levels 2800, 2890, and 3,050 respectively.

On the downside, pullbacks below 2760 are expected to find support at 2,680, 2,630, 2,600, and 2,480 respectively.

 

--- Written by Razan Hilal, CMT – on X: @Rh_waves

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