Recently, there has been a surge in the global gold market, mainly due to investors seeking safety in precious metals amidst Middle East geopolitical tensions. Gold prices have shown remarkable resilience, marking three consecutive weeks of gains. As we approach the new week, the focus is on two significant factors: the Federal Reserve's meeting and the situation in the Gaza Strip.
Expected Federal Reserve Position
The forthcoming Federal Reserve meeting, scheduled for October 31st and November 1st, is crucial for the gold market. Analysts predict that the Fed will maintain its current interest rates, which could potentially boost gold prices. This expectation is based on recent data indicating the stability of the US economy.
Stable US Economy
Recently released economic data on Friday revealed a stable economic outlook. Inflation has gradually decreased, and consumer consumption continues to grow. These factors strengthen the market's anticipation of the Fed's measured approach, increasing gold's attractiveness.
Gold ETFs and Investor Sentiment
The behavior of gold exchange-traded funds (ETFs) plays a vital role in the global gold market. This year, funds like the SPDR Gold Trust have consistently been net sellers. However, a recent change has seen these ETFs becoming net buyers, although with relatively weak buying power. This suggests that investors are still cautious but recognize gold's potential as a safe-haven asset.
Gold's Rising Path
Gold has not only maintained its upward momentum but has also crossed the psychologically significant $2,000 level at the start of the new week. This impressive rise coincides with the US Dollar Index (DXY), which measures the US dollar's value against a basket of global currencies. The DXY has been fluctuating around 106.60 after retreating from 106.90. Even positive economic data from the United States failed to strengthen the dollar, ultimately benefiting gold prices.
Looking ahead, the outlook for gold prices remains positive. It is widely expected that the Federal Reserve will keep its current interest rates in its upcoming meeting, which could further support gold prices' upward trend. Moreover, approximately 55% of experts predict that gold prices will continue to rise, reflecting the ongoing demand for safe-haven assets. About 27% of experts expect a decline in gold prices, while the remaining 18% believe prices will remain relatively stable.
The price levels of 2000 and 1993 have emerged as strong support levels in the gold market, and there are no clear signs of a rebound. Currently, we are witnessing a correction within the price range of 1992. Additionally, it's worth noting the price reaction within the 1997 range, providing opportunities for low-volume trading activities.
In summary, the global gold market continues to shine as a safe haven for investors, driven by global uncertainties and the upcoming Federal Reserve meeting. The recent stability in the US economy, along with changing sentiment among gold ETFs, underscores the enduring appeal of this precious metal. As we move forward, it is evident that gold will remain a key asset to monitor in the ever-changing landscape of global finance.
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