On Monday, gold prices pulled back from last week's five-month high. This occurred amid a stronger U.S. dollar and rising Treasury bond yields ahead of this week's release of crucial economic data.
On Friday, gold prices hit the highest level since mid-May, rising about 9% over the past two weeks due to tense Palestinian-Israeli relations.
However, the situation in the Middle East remains uncertain, despite a number of positive signs, including the arrival of humanitarian aid in the Gaza Strip. According to the parties involved, they are preparing for an escalation of the situation.
According to IG market strategist Yep Jun Rong, the intensification of geopolitical tensions in the Middle East will boost gold prices. If the situation eases, the yellow metal's price will drop.
Today's picture in the markets, with investors' interest in safe-haven assets fading after the weekend, is a copy of last Monday's session, said Tony Sycamore of IG Australia.
Global markets have been in turmoil in recent weeks as Treasury bond yields have risen. It was also caused by growing concerns over the likelihood of U.S. interest rates remaining at high levels for a prolonged period of time.
This week, market participants will be looking for clues on the global interest rate outlook, based on inflation data in Australia and Japan. Updated indicators of economic activity in the U.S. and Europe are also expected.
Speculators in the COMEX gold market increased their long positions by 41,867 contracts during the week ended on October 17, adding 56,655 contracts, last Friday's data showed.
Gold prices are forming an uptrend on the H4 timeframe.
Bulls Power indicator (standard values) remains in the positive zone, showing the strengthening of the ascending channel. Price correction may occur due to the strong news background this week.
The short-term outlook for GOLD suggests buying.
The target is at the level of 2050.00.
Part of the profit should be taken near 2000.00.
The Stop-loss is set at 1915.00.
Bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.