On Monday (October 21st), in the early European market session, spot gold fell from the record high it had previously touched, with the current gold price hovering around $2,725 per ounce. In a Monday article, Dhwani Mehta, a senior analyst at FXStreet, analyzed the technical trend of gold prices.

During the Asian market session on Monday, the gold price once soared to $2,732.84 per ounce, setting a new historical high.

Mehta wrote that in the early morning of Monday, the gold price consolidated near the record high. Gold buyers are waiting for speeches by Federal Reserve policymakers to gain new trading momentum.

From a technical perspective, Mehta pointed out that the Relative Strength Index (RSI) on the gold daily chart remains in the overbought area, and investors need to be alert to a possible pullback in gold prices.

Mehta stated that the ongoing tension between Israel and Iran supports the gold price. According to Lebanese media reports, Israel launched a new round of airstrikes on southern Beirut after declaring the al-Qard al-Hassan financial institution of Hezbollah as a target. In addition, the U.S. government has launched an investigation into the unauthorized leak of confidential documents that detail Israel's military preparations for a possible attack on Iran. During geopolitical turmoil, investors are more willing to flock to traditional safe-haven assets like gold.

Advertisement

Mehta said that since there are no top-tier economic data in the United States on Monday, the market's focus will still be on risk sentiment and speeches by several Federal Reserve policymakers to seek a new directional driving force for gold prices.

Latest gold technical analysis?

Mehta wrote that on Monday, the gold price rose again, challenging the $2,730 per ounce level. The 14-day Relative Strength Index (RSI) flattened while remaining above the overbought area of 70. This indicates that buyers are facing exhaustion, and a pullback may be imminent.Mehta pointed out that the recent support level for gold prices is expected to be at the low point of last Friday's $2,692 per ounce. If this level is breached, there is no rule out the possibility of gold prices falling to the support level of $2,670 per ounce.

If the gold price continues to break through the above levels, sellers will challenge the key 21-day simple moving average (SMA) support level of $2,653 per ounce.

On the other hand, Mehta added that if gold buyers effectively break through $2,730 per ounce, it will be inevitable to test the psychological barrier of $2,750 per ounce.