Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Gold Spots (XAUUSD) are holding their ground around the $1,860 an ounce price level on Tuesday, benefiting from a softer dollar and lower Treasury yields. This stability comes on the back of a sentiment that the US Federal Reserve won’t raise interest rates in November. Fed officials, including Vice Chair Philip Jefferson and Dallas Fed President Lorie Logan, have expressed caution regarding the recent surge in yields, suggesting that the central bank needs to proceed carefully.  

Market sentiment indicates an 86% chance that the Fed will maintain rates next month. Geopolitical tensions in the Middle East, stemming from the Israel-Hamas conflict, have also contributed to gold’s rise as a safe-haven asset. However, the market remains cautious, waiting for more information and economic data, including US inflation figures, to gauge the overall impact on gold prices. 

Technical 

On the 4-hour chart, gold is trading above the 20-SMA (green line) and 50-SMA (blue line) but below the 100-SMA (red line). The 100-SMA is also above the 20-SMA and 50-SMA. The Relative Strength Index (RSI) indicates a longer-term bullish trend, suggesting potential upward movement.  

Short-term opportunities may arise if gold can break resistance at $1,865.22 per ounce, with potential targets at $1,880.05 and $1,901.02 per ounce. Conversely, sustained downward pressure could lead to support tests at $1,844.45, followed by $1,833.45 and $1,814.67 per ounce. 

Summary 

Traders should remain attentive to key economic releases, Fed minutes, and geopolitical developments for further price direction.  

A potential upside towards the $1,880.05/ounce could arise should the $1,8655.22 price level fall. However, a break below the $1,844.45/ounce level would leave the $1,833.45/ounce support level within the bears’ reach in the short term. 

Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire.