Gold prices rebounded from a sharp nine-consecutive-day drop ending October 5 to surpass the third daily-range resistance level of around $1,987 per ounce recorded on July 20.
Impacted by the current armed conflict between Israel and Palestinian Islamist movement Hamas, this created a U-shaped price movement.
The daily price bull run started on October 6, with a new day high of $1,834.83 per ounce, closing higher than the previous day’s levels.
And by October 25, the gold price was indicating a retracement at around $1,976 per ounce.
The trend has been present since the breakout of the $1,915 to $1,929 per ounce congestion range.
Geopolitical crises traditionally increase demand for safe-haven assets such as gold, with the Israel-Hamas war a clear fundamental that shook market sentiment and movement, leading to the uptick in price.
The price of gold – following the attack two days previously by Hamas fighters on communities in southern Israel that saw some 1,400 people killed – opened higher on October 9, reaching $1,850 per ounce.
However, on October 23, the precious yellow metal opened slightly down on previous days at $1,972 per ounce amid calls for de-escalation from global leaders.
“US President Joe Biden and the leaders of France, Germany, the UK and Canada spoke on Sunday about preventing the Israel-Hamas war from spreading to the wider Middle East,” Bloomberg reported on October 23.
Technically, gold was still in a major bullish trend with small price corrections. But it could fluctuate as an intensification or de-escalation in hostilities can affect its price, prompting investors and traders to closely follow updates and follow the trend.
For this week’s recommendation, gold could experience sideways movement or fall to around $1,956 with the US “Advance GDP Price Index” economic data for the third quarter of 2023 – set for release on October 26 – forecast to be 4.5 per cent.
This is 2.4 per cent higher than the previous revised quarter, supporting the US dollar against gold.
However, should the Israel-Hamas war intensify further, the price of gold could potentially move quickly to around $2,005.
