Biden’s Withdrawal Spurs Risk Repricing, Impacting Gold Prices
U.S. President Joe Biden’s announcement on Sunday that he will not seek re-election in November has triggered a recalibration of risk across financial markets, notably influencing gold prices on Monday. Although the news did not surprise political insiders or market observers, it has heightened market volatility.
In the medium term, analysts suggest that Biden’s departure could be beneficial for gold. The absence of a familiar figure like Biden introduces additional uncertainty into the presidential race, which could bolster gold’s appeal as a safe-haven asset.
James Hyerczyk, an analyst at FX Empire, noted, “The appeal of gold has increased as investors seek protection against an unpredictable political and economic environment. Biden’s exit has paved the way for another Democrat to contest Donald Trump, contributing to a weaker dollar and enhancing gold’s attractiveness to those holding other currencies.”
Hyerczyk added that should Trump win the presidency, his proposed economic policies—such as corporate tax cuts, interest rate reductions, and tougher trade measures with China—could drive inflation. “These policies, particularly the potential for increased tariffs, could generate inflationary pressures,” he explained.
On the technical front, Hyerczyk highlighted that the 50-day moving average at $2,359.86 is a crucial support level, with the 200-day MA at $2,163.01 providing longer-term support. Despite gold’s longer-term uptrend, there are notable downside risks. Immediate support is at $2,385.28, and a drop below this level could signal a short-term pullback. Resistance is seen in the $2,450-$2,480 range, with a move above $2,483.74 potentially targeting $2,500. Conversely, a fall below the 50-day MA could indicate a deeper correction.
“The significant gap between the current price and the 50-day MA suggests that the market may be overbought in the short term,” Hyerczyk cautioned.
Short-term traders observed gold’s decline to its support level during the North American session with concern. Analyst Jennie noted, “Gold fell as anticipated. The immediate support level is $2,384. If this level is breached, the next target for gold will be $2,366.10. If gold holds above this support, it may rebound with short-term targets at $2,390 and $2,400.”
Elliott wave analyst Grega Horvat commented on the market’s bearish reversal: “The new intraday low for gold confirms a bearish reversal, suggesting a deeper correction ahead.”
Following a drop to a session low of $2,383.93 just after 10:30 am EDT, spot gold has seen a modest recovery but remains below the $2,400 mark. As of the latest update, spot gold was trading at $2,391.99 per ounce, reflecting a 0.37% decline on the daily chart.
