On Tuesday (October 15th) in the early European market, spot gold rebounded sharply in the short term, with the gold price just breaking through $2,653 per ounce. At the end of the Asian market, the gold price fell to a daily low of $2,638.06 per ounce. Dhwani Mehta, a senior analyst at FXStreet, wrote an article analyzing the technical trend of gold prices.
As long as the gold price holds the 21-day moving average of $2,635 per ounce, the gold price may find new demand. Looking at the daily gold chart, the Relative Strength Index (RSI) remains bullish.
The retreat of U.S. Treasury yields puts downward pressure on the dollar, allowing gold buyers to catch their breath for a while. However, gold prices may face resistance from the easing of geopolitical tensions between Israel and Iran.
Previously, Israeli Prime Minister Netanyahu told the United States that Israel would strike Iran's military targets, not nuclear or oil targets. Reports suggest that to prevent a full-scale war, there will be a more limited counterattack.
Attention now turns to more speeches by Federal Reserve policymakers to seek new trading momentum for the dollar and gold prices. Before the release of U.S. retail sales data on Thursday, gold traders may also adjust their positions.
The market continues to bet that the Federal Reserve will cut interest rates by 25 basis points in November. According to the "Fed Watch Tool" of the Chicago Mercantile Exchange Group (CME Group), the possibility of a 25 basis point rate cut is about 86%.
How to trade gold?
So far this week, gold prices have been supported above the key 21-day simple moving average (SMA) support, which is currently at $2,635 per ounce.
The 14-day Relative Strength Index (RSI) remains stable above the middle line, suggesting that any decline in gold prices may be a good opportunity to buy recently.
If the gold price recovers, the next bullish target may be the previous high of $2,667 per ounce, followed by the recent high of $2,670 per ounce. If gold continues to rise, the record high of $2,686 per ounce will become the target.On the downside, the short-term support level for gold prices is seen at the 21-day moving average. Should the price break below this level, it will test the three-week low near $2,600 per ounce. If the gold price continues to fall below the latter, the decline may extend towards the low of $2,585 per ounce on September 20th.
