Gold price (XAU/USD) surged to a multi-week high around the $1,932-1,933 range on Friday, driven by escalating tensions between Israel and Hamas, which prompted investors to seek refuge in safe-haven assets. However, the current session saw a minor retreat as the precious metal failed to capitalize on the recent momentum beyond the crucial 200-day Simple Moving Average (SMA). Elevated US Treasury bond yields also contributed to profit-taking.
Despite the dip, the gold price managed to hold above the $1,900 mark, benefitting from a relatively subdued US Dollar (USD) performance. Market participants are awaiting fresh cues on the Fed’s future rate-hike trajectory and significant economic releases from China before positioning themselves for the next potential move.
Meanwhile, the situation in the Middle East remains tense, with Israel preparing for a potential ground assault in the Gaza Strip and facing the threat of additional conflicts on its northern border with Lebanon. Iran has also issued warnings regarding the ongoing bombardment.
In the US, October’s consumer sentiment has shown a decline, indicating that the Fed may keep rates unchanged for the second consecutive month in November. However, expectations for inflation have risen, leaving room for potential rate hike moves by the end of the year.
From a technical standpoint, while the gold price currently hovers around the $1,900 mark, a more significant support level is anticipated at the $1,900 round-figure mark, aligned with the 100-day SMA. On the upside, a breakthrough past the recent high at the $1,932-1,933 zone could pave the way for further upward movement, potentially reaching the heavy supply zone at $1,945-1,947.
As the market continues to closely monitor these developments, investors remain watchful for any shifts in the gold price and its potential impact on the broader financial landscape.