Gold discovered buying interest as the Israel-Hamas tension supported the risk aversion trend. Thus, gold prices rose to $ 1,850 with a new catalyst. Meanwhile, U.S. job growth remained surprisingly upbeat in September. Strong NFP data from the USA increases the possibility of the Fed making another interest rate increase. This limits the upward movement of gold.
The yellow metal remains balanced under the influence of different winds!
The escalating tension between Israel and Hamas created a negative atmosphere in the markets. This increased interest in safe haven assets. Thus, gold prices recovered rapidly and rose to around $1,850. The yellow metal found a boost from deepening geopolitical tensions. However, it barely offset the blow from surprisingly strong Non-Farm Payrolls (NFP) data for September.
Comments from Dallas Federal Reserve Bank President Lorie Logan were also supportive for gold prices. The Fed’s Logan placed less emphasis on raising interest rates further if long-term interest rates remain high due to high term premiums. However, strong employment growth in the US has raised expectations that the Fed will raise interest rates once again as progress in controlling inflation may slow. Fed Chair Michelle Bowman said she supports further tightening by the Fed to bring inflation down to 2% in a timely manner. In the coming period, market players will carefully monitor the US Consumer Price Index (CPI) data.
Gold price technical analysis
‘cryptokoin.com’As you follow from, gold found geopolitical support after sharp declines. However, nothing may change in its technical appearance. Technical analyst Christopher Lewis evaluates the technical picture of gold in his unique style.
The “death cross” formation is still valid for gold!
Gold prices, HIt started the trading session on Monday significantly higher after Amas attacked Israel. It is certain that war has come to the region. Therefore, this has caused people to seek safety in any way they can find. Gold is of course considered a security asset in the long term. So it will be interesting to see how this plays out. I think we’re still very much in a downtrend. So whether this will last is a completely different question.
The 50-Day EMA is starting to approach the 200-Day EMA and it looks like we are getting ready to have the so-called “death cross” form. This is of course a very negative sign. It also means that long-term traders will also look at this as a technical signal to get involved. If this is to be the case, I think it is only a matter of time before we see gold fall back to its previous level and possibly even below the $1,800 level. Of course, $1,800 is a big, round, psychologically important number. It’s also an area that I think will receive a lot of attention due to its previous support. One has to assume that there are a lot of options transactions waiting to happen in this general environment.
The potential for fluctuation is very high in the coming days
However, if gold prices continue to rise from here, $1,900 above will also pose some resistance. We need to keep this in mind. At this point, traders will continue to look at it through the prism of whether they can feel safe holding something other than the US dollar. Also, of course interest rates have a big impact on what happens next.
After all, high interest rates make gold very unattractive. Because it’s easier to make money on paper than to pay storage fees for large amounts of metal. Therefore, the potential for volatility in gold prices over the next few days is very high. So I’m not overly excited about taking large positions in this market. I believe we are still in a downtrend. But it was definitely a shot!
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