On Monday (October 21), in the early Asian market session, spot gold continued to rise, with prices breaking through $2726.21 per ounce, once again setting a historical record. From the technical charts, gold is steadily running within an ascending channel and has broken through the 100-hour moving average. Currently, gold prices are approaching the overbought region of the 14-hour Relative Strength Index (RSI), suggesting there may still be room for further short-term gains. Last Friday, spot gold surged by $28.64, a rise of 1.06%, closing at $2721.38 per ounce.
Alexander Zumpfe, a precious metals trader at German Heraeus Metals, pointed out that as the conflict between Israel, Hezbollah, and Hamas escalates, investors are flocking to gold as a safe haven. The uncertainty of the U.S. election and market expectations for loose monetary policy have also become key factors driving gold prices.
From a macroeconomic perspective, the global monetary policy remains loose, especially as the Federal Reserve maintains a delicate balance between inflationary pressures and economic slowdown, providing strong support for the continuous rise of gold prices. In addition, the growing uncertainty in global markets has heightened investor concerns about economic recession, further boosting the demand for gold as a safe haven asset. Under the current high-level consolidation, gold prices may continue to benefit from global economic fluctuations and policy directions.
From a technical perspective, as the 14-hour RSI approaches overbought levels, it is expected that gold prices will test $2736 per ounce soon, and might even break through the $2754 per ounce level. Conversely, if the market corrects, bears might seek to take profit at $2701 per ounce or lower at $2682 per ounce.
In the long term, if geopolitical risks persist, gold prices may still have the potential to break through $2768 per ounce in the coming weeks and challenge the target level of $2821 per ounce.
