Gold prices fell to a near two-week low on Tuesday as the dollar firmed and safe-haven demand slowed.
According to Kyle Rodda, a financial analyst at Capital.com, the current situation in the gold market is still about geopolitical risks. However, some reduction of these risks has been reflected in the gold prices.
The situation in the Middle East has stabilized a bit after Israel announced a "tactical short pause" for humanitarian purposes.
Meanwhile, investors grew more confident that the Fed may be done with its monetary tightening cycle after the release of weak U.S. employment data for October last week. However, Fed Bank of Minneapolis President Neel Kashkari said that the central bank should continue its efforts to control inflation.
Market participants are now waiting to see if Jerome Powell will maintain the more dovish stance he took last week.
Meanwhile, Jin Hennig, Managing Director and Head of Metals at the Chicago Mercantile Exchange (CME), expressed her opinion on the prospects for gold. As of today, gold starts to fully reveal its investment potential amid inflation risks and geopolitical tensions.
According to the specialist, earlier, the retail market of gold remained untapped.
In October, the escalation of the conflict in the Middle East increased investors' interest in gold as a means of hedging risks. At the same time, solid investment demand in gold comes even as the market has seen lackluster price action through most of 2023. Hennig said that traders continue to see value in holding it as a safe-haven asset in their portfolios.
Gold quotes show an upward trend on the daily chart.
In terms of wave analysis, the price is forming the second descending wave on the H4 timeframe. Approaching of the price to the strong support at the level of 1960 may create conditions for the reversal of gold price and the formation of a new upward wave. Moving indicator Stochastic Oscillator (standard values) is approaching the oversold zone, which may also portend a change in the direction of price movement.
Signal:
Short-term prospects for GOLD are to buy.
The target at the level of 2065.00
Part of the profit should be taken near the level of 2000.00
A stop-loss could be placed at the level of 1900.00
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
