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Play of the Day: Spot Gold (XAU/USD) Is Heading for New Weekly Highs!

October 19, 2023| Forex Market

Spot gold has found support from a key inflection point!

Think XAU/USD is ready to extend its uptrend?

We’re looking at what’s happening in the 15-minute chart:

XAU/USD 15-min Forex

XAU/USD 15-min Forex Chart by TradingView

If you’ve just tuned in to the markets, you should know that traders are mostly staying away from “risky” bets over a lot of uncertainty.

Global leaders haven’t found a workable solution to the current tensions between Israel and Hamas. Global bond yields also remain elevated, which points to lower investor confidence and higher borrowing costs for major financial players.

Last but not least, inflation reports have so far shown that consumer prices remain high enough to keep threats of further rate hikes alive.

These factors may have contributed to XAU/USD breaking above its higher lows pattern in the 15-minute time frame. As you can see, price is now trading above its trend line resistance after finding buyers near the $1,945 area.

Are we looking at a chance to enter before XAU/USD makes new weekly highs?

Gold buyers can consider scaling in at current levels or as soon as the next candlesticks confirm an upside breakout above $1,950. The previous high is a good initial target for short-term traders but you can also eye the big $2,000 handle if we see enough bullish momentum.

Today’s U.S. data releases and FOMC member speeches may make or break XAU/USD’s upswing. The markets are expecting mixed mid-tier data results from the U.S. but notable surprises may affect USD demand.

Traders also see Fed Chairman Powell dialing down his hawkishness amidst crazy high bond yields but again, watch out for surprises that may affect USD’s weekly trends!

If we do see pro-risk, anti-USD themes in the next trading sessions, then you may also consider shorting XAU/USD until it dips back to its $1,945 Pivot Point and 100 SMA support zone.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

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