GOLD Price Analysis – Oct 30, 2023

Daily Price Outlook

Gold (XAU/USD) price recently surpassed $2,000, marking its highest value since May 16, and it has achieved three consecutive weeks of gains. However, the US Dollar (USD) is gaining strength, primarily due to the increasing yields of US Treasury bonds, driven by expectations of the Federal Reserve (Fed) tightening its policies. This dynamic is putting pressure on XAU/USD bulls (gold buyers), keeping them on the defensive side and preventing gold from breaching the $2,000 threshold.

On the positive side, the ongoing conflict between Israel and Hamas is offering some support to gold. This geopolitical tension is prompting people to seek safe-haven investments, such as gold, which could help prevent a significant price decline. So, while gold is facing challenges due to the strong US Dollar, it is also finding support from the Israel-Hamas conflict.

Moving on, traders may choose to be cautious and avoid making big bets on gold due to upcoming central bank events this week. The Bank of Japan (BoJ) will announce its policy decision on Tuesday, followed by the Federal Reserve (Fed) releasing its monetary policy update on Wednesday, and the Bank of England (BoE) meeting on Thursday.

Investors will also be closely monitoring China's official PMIs to gain insights into the business climate in the world's second-largest economy. Furthermore, data such as the preliminary EuroZone GDP and CPI, along with the US monthly jobs report (NFP), are expected to exert a influence on the gold market.

Gold Price Drops Amidst Geopolitical Tensions and Strong US Economy

It's worth noting that the price of gold dipped below the $2,000 mark on Monday. Nonetheless, there is a mounting concern regarding the escalating tensions in the Middle East, which may prevent gold from undergoing a substantial decline. In northern Gaza, Palestinians have reported heavy air and artillery strikes as Israeli forces, supported by tanks, have initiated a ground assault in the besieged area.

On the economic front, the US Commerce Department has reported that consumer spending in September exceeded expectations, with inflation for the month also on the rise. Furthermore, a positive US GDP report revealed that the country's economy experienced its most robust growth in nearly two years during the third quarter. This strong showing by the US economy reinforces the Federal Reserve's hawkish stance, maintaining the possibility of another interest rate hike before year-end. This stance keeps US Treasury bond yields elevated and continues to bolster the US Dollar, which poses a challenge for gold.

Traders are awaiting the outcome of a pivotal two-day FOMC monetary policy meeting to gather insights into potential future rate hikes before making any significant market moves.

Key Global Events Impacting Financial Markets This Week

Moreover, the Bank of Japan and the Bank of England are set to make significant policy announcements this week, potentially bringing about notable developments in the global financial markets. Investors will be closely monitoring the official Chinese PMIs, preliminary EuroZone inflation and economic growth figures, and the much-anticipated US jobs report (NFP) for guidance.

GOLD (XAU/USD) - Technical Analysis

On October 30, the financial spotlight remains firmly on GOLD as its technical posture continues to be a focal point for traders globally. Currently, GOLD is priced at $2002.315, marking a modest decline of 0.23% over the last 24 hours.

Although its exact rank can vary among different financial metrics, there's no disputing GOLD's stature as a premier trading asset. Its market capitalization, reflecting its significance, extends into the billions, underscoring its weight in global financial markets. The supply data, too, paints a picture of abundance, with millions of ounces in active circulation.

Delving into key price levels, the asset finds its pivot point at $1994, with immediate resistance at $2012, followed by further resistances at $2032 and $2050. On the flip side, support levels are noted at $1980, $1964, and then $1947. The technical indicators are also telling. The RSI stands at 64, hovering above the 50 mark, signaling bullish sentiment.

The MACD, with its line at 1.064, has surpassed the signal line at 8.31, hinting at a potential upward push. Furthermore, the 50 EMA for GOLD sits at $1969, and with the current price above this mark, a short-term bullish trend is suggested. The charts reveal an upward channel pattern for GOLD, emphasizing its bullish momentum.

In conclusion, the overarching sentiment for GOLD leans bullish, particularly when it remains above the $1994 pivot point. If this momentum holds, the asset might soon be testing the $2012 resistance. However, it's always prudent for investors to stay attuned to global economic shifts that could sway GOLD's trajectory.

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