Gold Attracts Safe-Heaven Flows as Middle East Violence Flares Up


XAU/USD Analysis

Palestinian group Hamas launched a surprise and deadly attack on Israel, which retaliated with operation Swords of Iron. The flare up in the Middle East conflict boosts oil prices and sends gold higher as well, as the latter attracts risk-off flows.

XAU/USD managed to avoid fresh 2023 lows the risk aversion may give it the change to reclaim the EMA200 (at round 1,891). Daily closes above would pause the downside bias, but we are cautious around its ascending prospects and the upside looks unhospitable, with multiple roadblocks.

Despite today's surge, XAU/USD comes from a losing month die to the Fed's hawkish bias which benefits the greenback and Friday's strong NFPs support the higher-for-longer narrative. The commodity is in risk of new 2023 lows (1,804), although further losses towards and beyond 1,765 may prove elusive in the near term. The daily chart is also unfavorable since a Death Cross has formed (EMA50 < EMA200), which is often a precursor of sustained weakness.

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Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

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