Article by: ETO Markets

On Friday, gold gained some upward momentum amid a slight pullback in the dollar, climbing to near $2,668, near its intra-week high. The dollar rebounded this week from its lowest point since July, and despite a pullback after hitting a one-month high on Thursday, its firm performance has kept pressure on gold prices. At the same time, the ongoing tensions in the Middle East, especially the intensifying conflicts between Israel and Iran and Hezbollah in Lebanon, have boosted safe-haven demand and supported gold's appeal as a safe-haven asset.

Nonetheless, the reduced likelihood of a significant rate cut by the Federal Reserve in November limits the downside of the dollar and correspondingly inhibits the upside potential of non-yielding gold. In addition, investors are focused on the upcoming U.S. non-farm payrolls report (NFP), which will give the market more clues on the Fed's future policy path. While the dollar may provide some resistance to gold prices, geopolitical risks and labor market stability could provide further support for gold.

From a technical point of view, the recent range-bound gold price can be seen as a bullish consolidation phase after a strong rally. Momentum indicators on the daily chart remain in positive territory and have eased from overbought conditions, suggesting that bullish sentiment remains dominant. In the short term, the $…-… area may provide immediate resistance, followed by the $…-… area, the all-time high set last week. If this area is breached, gold could further challenge the $… mark and start a new uptrend.

On the other hand, the $…-$… area is the key support level, a break below this support could trigger further technical selling, with targets pointing towards the $… and $… areas. If gold falls further, it could test the $…-… support area and even dip down to the psychological $… level.