Gold prices tumbled in today’s US session after a positive European session. The precious metal rallied from a low of 2628 in the European session to trade at a high of 2652 before the US open. However, renewed US Dollar strength and concerns about China’s economic slowdown influenced the pullback.
Despite the decline, ETF demand for gold remains strong, and geopolitical risks in the Middle East persist. This suggests that buying pressure on gold remains intact.
From a technical analysis perspective, gold has broken out of a recent range, and further support and resistance levels have been identified.
ETF Demand Remains Strong and Geopolitical Risks Remain
The Middle East crisis is still unresolved, with the potential for escalation following the recent Iranian missile attack. This situation could reignite the safe haven appeal of gold. The latest World Gold Council report shows that net ETF inflows increased in September, indicating strong demand trends.
Central banks’ interest in gold also suggests continued support in the medium to longer term. This indicates that the current pullback in gold prices may be temporary.
Economic Data Ahead
FOMC minutes will be released tomorrow, but it may not have a significant impact following last week’s jobs data release. The US CPI data on Thursday is expected to be a major market-moving event.
Technical Analysis Gold (XAU/USD)
Gold has broken out of a tight range since the start of October, with a significant selloff today. Immediate support is around 2600, while resistance levels lie at 2624 and 2630. The 200-day MA at 2574 could provide a tough hurdle to clear for sellers.
Source: TradingView
Support
Resistance