Markets Analysis

Gold Surges Since March, Escalating Concerns Near Israel【October 16, 2023】

October 16, 2023

Markets Analysis

Fundamental Analysis

  • The situation in Israel intensifies as preparations for a ground invasion into the Gaza Strip are underway. 
  • Saudi Arabia halts normalization of relations with Israel, leading to a strong backlash from Iran. 
  • Safe-haven assets see increased inflows, with Gold and the Swiss Franc notably in demand.

XAUUSD Technical Analysis

Analyzing the daily chart of Gold prices, it currently approaches the 240-day moving average while exhibiting movement near the upper band of a descending channel. The Ichimoku Cloud’s lagging line has crossed above the candlesticks.

From a technical standpoint, a potential pullback is possible at this juncture, but the current dynamics are largely driven by fundamentals. Especially if conflicts around Israel escalate, an uptrend in Gold is anticipated. Reactions from Middle Eastern nations, fluctuations in US Treasury yields, and the dovish stance of US financial authorities are all factors that can influence Gold prices.


Day Trading Strategy (Hourly)

Examining the daily chart of Gold prices, Gold is currently on the rise within a highly volatile environment. The 1-hour RSI has reached 85, suggesting the possibility of profit-taking selling once it drops below 70. However, in this situation, a drop below 70 may not immediately be interpreted as a selling signal.

To ride the uptrend, it’s advisable to wait for pullbacks before buying. $1,907 is likely to serve as a significant support level. Quick entries from the current stage should be avoided. As a day trading guideline, consider buying after the RSI drops below 70 and a correction has occurred. Entry at USD 1,907, exit at USD1,967, and stop loss at USD1,895.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

1,967 USD: Monthly resistance line
1,948 USD: Historical major resistance line


Market Sentiment

XAUUSD Sell: 77% Buy: 23%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Industrial Production in Japan13:30
NY Fed Manufacturing Index21:30
FOMC Member Speeches23:30

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.