On Wednesday (October 23rd), during the Asian market session, spot gold was trading near $2740 per ounce; gold prices had surged by over 1% in the previous trading session. Valeria Bednarik, the Chief Analyst at FXStreet, wrote an article analyzing the technical outlook for gold.

Bednarik noted that gold hit a record high on Tuesday, approaching $2750 per ounce. Amidst the looming market sentiment due to the tense situation in the Middle East, gold maintained a positive tone.

Bednarik pointed out that as gold continues to set new highs, the bulls are currently in complete control of the situation.

On Tuesday, influenced by factors such as the risk-aversion demand stirred up by the Middle East conflict, the price of spot gold surged by over 1%, reaching a historical high once again.

Spot gold closed on Tuesday with a significant increase of $29.19, a rise of 1.07%, at $2748.68 per ounce; during the trading session, the price touched a high of $2748.89 per ounce, setting a new historical record.

Bednarik stated that speculative interest has begun to digest the possibility of a slowdown in the Federal Reserve's rate cuts. Tax and tariff policies are seen as potential inflation accelerators, even increasing the likelihood of rate hikes. U.S. Treasury yields continued to rise on Tuesday, with the 10-year U.S. Treasury yield reaching 4.20%, the highest level since the end of July. The 2-year U.S. Treasury yield touched 4.05%, also setting a new multi-week high.

Advertisement

Grant said, "If the situation in the Middle East continues to escalate, it is expected that by the end of the year, the price of gold could reach $3000 per ounce."

In times of geopolitical and economic uncertainty, gold is seen as a safe-haven asset to hedge against risks, and lower interest rates also enhance the investment appeal of gold. Gold has risen by over 33% so far this year and has set historical highs on multiple occasions.

Short-term technical outlook for gold:

Bednarik indicated that a risk-averse environment suggests that gold will continue to set new highs. Although technical indicators show signs of being overbought, there is no sign of bullish exhaustion.Bednarik noted that, from a technical standpoint, gold is poised to continue its upward momentum. The daily chart indicates that technical indicators are reaching new highs while trending upwards. Concurrently, the gold price is significantly above bullish moving averages, with the 20-day Simple Moving Average (SMA) currently around $2,668 per ounce, well above the longer-term moving averages.

Bednarik added that the near-term outlook also supports the continuation of gold's upward trend. On the 4-hour chart, technical indicators have resumed their upward trajectory, maintaining an upward slope, even though the RSI is in the overbought territory but still moving higher. Meanwhile, the gold price is trading above bullish moving averages, with the current 20-period SMA around $2,718 per ounce.

Valeria Bednarik provided the latest key support and resistance levels for gold prices:

Support levels: $2,716.40 per ounce; $2,700.00 per ounce; $2,685.45 per ounce

Resistance levels: $2,740.00 per ounce; $2,755.00 per ounce; $2,770.00 per ounce

As of 10:47 Beijing time, spot gold was quoted at $2,739.73 per ounce.