Baxia Markets
October 31, 2023

Gold Correction Phase: Can It Sustain Its Bullish Momentum?

market analysis header image

Gold experienced increased buying pressure late in the US trading session on Friday, following the news of Israel's ground offensive. This surge in demand for safe-haven assets contributed to gold ending the week on a positive note.


As the new week begins, there appears to be a modest improvement in market sentiment, with gold approaching the $2000 mark. To sustain the bullish rally, it is crucial for gold to establish firm support above the $2000 level. The ongoing situation in the Middle East continues to be the primary driver of gold prices, especially in anticipation of the upcoming FOMC meeting on Wednesday. Absent any unexpected developments from the Federal Reserve, this geopolitical factor is expected to influence gold prices for the foreseeable future.


This week is marked by an abundance of economic data releases and the continuation of the US earnings season. Market participants are adopting a cautious stance leading up to the FOMC meeting, driven by uncertainties surrounding a potential interest rate hike by the Central Bank.



XAUUSD Price Action

XAUUSD has initiated a bullish correction after reaching a new high last Friday. The price appears to have settled comfortably and may have established support at the EMA 50. If this EMA maintains its support, it could potentially lead to the formation of a bullish reversal candlestick pattern, such as a morning star or a bullish three inside up pattern.

To confirm a further upward movement, the key resistance level at 2000.50 needs to be breached. Beyond that, the subsequent key resistance lies in the range of 2010 to 2022. 

In terms of the MACD indicator, the histogram has recently crossed above the 0 line, and the signal line is slightly above the 0 line as well. This MACD configuration is considered neutral, as the signal line has not yet crossed the 0 line, despite the histogram crossing it. 

The Stochastic indicator has exhibited a bullish cross at the EMA 50, further emphasizing the overall bullish trend in XAUUSD.

Key Economic Releases to Watch Today


Forecast 3.1% vs Previous 4.3%


Forecast 0.2% vs Previous 0.5%


Forecast 0.O% vs Previous 0.1%

US, Consumer Confidence

Forecast 100 vs Previous 103

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