Article by: ETO Markets

Gold prices (XAU/USD) are currently under moderate downward pressure, mainly due to the tug of war between rising geopolitical tensions in the Middle East and dovish interest rate cut expectations from the Federal Reserve. However, diminished expectations of a sharp interest rate cut by the Federal Reserve, coupled with the strong performance of the U.S. labor market, have limited gold's gains. While the market has reduced bets that the Fed will cut interest rates in November, the turmoil in the Middle East and the possibility that the Fed will continue to ease monetary policy in the future have provided support for gold. In addition, key data this week include the US ADP private sector employment report and Friday's non-farm payrolls (NFP), which could provide fresh momentum to the market and determine the short-term direction of gold prices.

From a technical point of view, the gold price is currently hovering in the important support zone of $…-$…. If this support area is effectively broken, it could trigger further technical selling and the price of gold could dip below $… with the risk of further declines towards $… and $….

Conversely, on the upside, the first resistance for gold prices is in the $…-… range, followed by last week's all-time high of $…-…. If these resistance levels are breached, the price of gold is expected to rise further, and the target will be the psychological level of $…, which will be a strong signal for the bulls to continue to push gold higher.