Gold glistens amidst geopolitical tensions to test 20-DMA

Gold price hit a weekly high of $1857.69, with the financial markets being hit by geopolitical unrest due to the conflict between Israel and Palestinian Islamist group Hamas during the weekend and bolstering the appetite for Gold’s safe-haven status.

>Technical Overview
XAU/USD daily chart shows that it hovers around $1,850 a troy ounce after closing on Friday at $1,831.90. Technical indicators began correcting extreme oversold conditions but, despite advancing, remain well into negative territory, falling short of suggesting another leg north. At the same time, the pair keeps developing far below bearish moving averages, with the 20 Simple Moving Average (SMA) currently providing dynamic resistance at around $1,884.

In the near term, the chances of an upward extension are firmer. Technical indicators maintain their bullish slopes near overbought levels, while XAU/USD develops well above a bullish 20 SMA. Gold would need to break through the aforementioned daily high to extend its positive momentum in the near term, while a slide through $1,844.15 will likely anticipate a decline towards the $1,830 price zone.
-Support levels: 1,844.10 1,831.90 1,824.10
-Resistance levels: 1,855.30 1,867.20 1,879.90

>Fundamental Overview
Gold prices gapped higher at the weekly opening, with XAU/USD peaking at $1,855.28 during Asian trading hours. The bright metal soared on the back of tensions in the Middle East. Israeli Prime Minister Benjamin Netanyahu declared the country was at war on Sunday, following a massive attack from the Palestinian Hamas group on Saturday. The unexpected situation spurred risk aversion and spurred demand for safe-haven assets on Monday, benefiting Gold the most.
The US Dollar also had its share of attention, appreciating against most major rivals throughout the first half of the day, although demand for the Greenback receded after London’s close. However, the United States (US) and Canadian markets are closed due to the celebration of Columbus Day, and it is yet to be seen how American markets will react to weekend news.
Data-wise, the macroeconomic calendar did not have much to offer at the beginning of the week, but it will include some interesting clues from the US. The Federal Open Market Committee (FOMC) will release the Minutes of the September Federal Reserve (Fed) meeting on Wednesday, while the country will publish the September Consumer Price Index (CPI). Inflation is seen up by 0.3% MoM and 3.6% YoY, while the core annual CPI is expected at 4.1%, easing from the previous 4.3%.

*Source: fxstreet