Current trend

Yesterday, the XAU/USD pair added 1.18%, reaching 2663.37 after reports of Iran’s attack on Israel in response to the liquidation of the leaders of the Lebanese paramilitary organization Hezbollah and the Palestinian movement Hamas. As a result of further escalation of geopolitical tensions, the asset may renew its historical high of 2685.00 but de-escalation of the conflict will lead to a loss of positions. Iranian Foreign Minister Abbas Araghchi said that Tehran’s action in response to Jerusalem’s actions is over but in the event of a provocation, a new attack will be stronger and more powerful, while Israeli representatives promise an unprecedented response.

The market is showing upward momentum and, according to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, net speculative positions in gold were 315.4K, up from 310.1K. As for the dynamics, the total number of open transactions in the asset reached a four-year high. The balance of “bulls” in positions secured by real money is 282.912K against 28.071K for “bears.” Last week, buyers opened 9.616K contracts, while sellers opened 7.404K, which confirms high demand from investors.

The trading instrument is moving in a long-term upward trend. Last week, it renewed the historical high of 2685.00 and reversed into a correction, within which it may test the support level of 2546.00, where long positions, with the targets of 2685.00 and 2750.00 are relevant. The RSI indicator (14) entered the overbought area a few days earlier, signaling the likelihood of a correction, in which it is moving.

The medium-term trend remains upward. In mid-September, the quotes broke the 2602.00–2591.00 area and headed to zone 4 (2707.00–2696.00) and zone 5 (2817.00–2806.00). A correction pattern is developing, which can reach the trend support area of ​​2580.00–2570.00, where long positions, with the targets of 2627.00 and 2685.00 are relevant.

Support and resistance

Resistance levels: 2685.00, 2750.00.

Support levels: 2546.00, 2471.00, 2378.00.

Trading tips

Long positions may be opened from 2546.00, with the target at 2685.00 and stop loss of 2500.00. Implementation period: 9–12 days.

Short positions may be opened below 2500.00, with the target at 2380.00 and stop loss of 2546.00.