XAU/USD 240 Minute Chart Analysis – 2023-10-19

Gold prices are currently influenced by several factors. Gold recently crossed the 200-Daily Moving Average (DMA) at $1,930, but it couldn’t sustain levels above $1,950. The 14-day Relative Strength Index (RSI) suggests a positive outlook for gold, with the next potential resistance levels at $1,972, $1,982, and $1,988 if it continues to rise. On the downside, support can be found at $1,950, with further support at $1,930 and $1,922, and the last line of defense at $1,912.

Fundamentally, geopolitical tensions in the Middle East, including escalating conflicts between Israel and Palestine, are contributing to safe-haven demand for gold. Additionally, broad risk aversion and surging oil prices are supporting gold’s safe-haven status. The US dollar is also benefiting from rising US Treasury bond yields and expectations of the Federal Reserve maintaining higher interest rates for an extended period. Fed officials have expressed the need for high-interest rates to target inflation. Gold’s recent retreat from over two-month highs below $1,950 is influenced by these factors.

Looking ahead, the market is awaiting Federal Reserve Chair Powell’s speech, which will be closely monitored for insights into the Fed’s policy outlook. US economic data, corporate earnings results, and developments in the Middle East will continue to influence gold prices.

From a technical perspective, gold is currently in a bullish trend but range-bound around $1,945. It is trading above the 200-day and 50-day moving averages. Scenario 1 suggests a potential decline with support levels at $1,937, $1,933, and $1,923, while Scenario 2 indicates a possible rise with resistance levels at $1,950, $1,954, $1,960, $1,966, and $1,973. The short-term momentum appears bullish but within a range, with the market possibly trading between $1,930 and $1,970 in the coming days.