The gold price (XAU/USD) experienced a brief decline at the start of the week, slipping from Monday’s opening bids of $1,933 to hover around $1,908 in early trading. However, the precious metal managed to recover alongside the broader market as investor sentiment improved.
Last week, geopolitical concerns relating to the Israel-Hamas conflict weighed on market sentiment. However, investors have started to shift their focus upwards, shrugging off the conflict and showing a renewed appetite for risk.
Gold is poised to continue the gains observed in the previous week. On Friday, XAU/USD recorded a significant upward movement, surging by almost 3.5% from bottom to top.
From a technical standpoint, gold prices are currently caught in a midrange consolidation on the daily candlesticks. The 200-day Simple Moving Average (SMA) near $1,930 has acted as a significant resistance level, leading to a rejection. On the other hand, the 50-day SMA is providing support, acting as a floor near the $1,900 mark. As a result, price action is currently sandwiched between these two moving averages.
The recent bullish reversal of XAU/USD from its early October lows, reaching around $1,810, has left spot gold stuck in familiar territory. This follows a drop from the $1,980 range seen in July.
As the gold market continues to navigate through these technical levels and investors closely monitor broader market sentiment, the future direction of XAU/USD remains uncertain. Traders will be keeping a watchful eye on how gold prices behave within this consolidation range and whether any catalysts can push them beyond the key resistance and support levels.