Gold technical analysis amid Iran-Israel uncertainty

  • Israel is possibly preparing to retaliate against Iran, aiming for a strong response to deter future attacks.
  • Gold prices stay strong, showing resilience even in the face of robust US economic data.

Gold hovers around the $2,370, with trading range relatively narrow as investors closely monitor updates on the Iran-Israel conflict. 

Israel’s stance on retaliating against Iran revolves not around whether but when and how to strike back. Bezalel Smotrich, Israel’s Finance Minister, advocates for a response that would impose a “disproportionate toll” on Iran, aiming to “shake Tehran” and deter future attacks. While any retaliation risks escalating the situation towards a broader conflict in the Middle East and a more profound global crisis, there’s a lingering hope that Iran’s reluctance for an all-out war, evidenced by their quick de-escalation following their recent attack, might mitigate the risk. 

Gold demonstrates resilience despite robust economic data from the US, suggesting that the current bull market isn’t solely influenced by conventional macroeconomic factors.  

On the XAU/USD chart, a downward movement might necessitate testing the previous all-time high of $2,300 to consider a substantial reversal. However, the broader bullish sentiment could appear to persist, supported by the 4-Hour Relative Strength Index (RSI) sliding below 50 and the Momentum indicator showing a downward trend above its midpoint. 

The 20 Simple Moving Average (SMA) possibly maintains a firmly bullish trajectory at approximately $2,281, sitting comfortably above the also bullish 100 SMA by roughly $200. 

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