Technical analysis by PSD_Trading about Symbol PAXG: Buy recommendation (10/19/2023)

XAUUSD | Rally Gathers Steam Following Gaza Hospital Blast XAUUSD PRICE FORECAST: - Gold's rally accelerates after Gaza hospital explosion. - The dollar index (DXY) continued its uptrend as Treasury yields hit multi-year highs but gold remained unaffected. - IG customer sentiment shows that retail traders are extremely holding on to gold. Gold rose today due to increased risk aversion caused by an explosion at a hospital in Gaza. Both Israel and Palestine blamed each other for the incident, raising concerns of a wider conflict. Gold prices surged towards $1950/oz as a result. FED POLICYMAKERS, MIDDLE EAST TENSIONS AND US TREASURIES The US had a strong week with retail sales surpassing expectations, leading to increased projections for a rate hike in December. Fed policymakers emphasized the importance of upcoming data and did not rule out additional hikes. Waller, a Federal Reserve policymaker, suggested that a slowdown in the real economy could result in rates staying steady. Analysts believe that the "higher for longer" narrative is gaining momentum. Additionally, longer-dated US treasuries have been performing well, with the 10-year yield reaching multi-year highs last seen in January 2007. Fed policymakers see this as beneficial in terms of managing interest rates. Given the strained relations with Israel, it is not surprising that Iran has been the most vocal country in the Middle East. While direct involvement from any specific country is unlikely, escalation through proxies is highly plausible. Smaller terror groups like Hezbollah could potentially join with support from regional countries. If the conflict brings the US more into focus, gold prices may accelerate. The $2000 level will be at risk if the conflict continues without a ceasefire or resolution, so it should be monitored in the coming days. RISK EVENTS AHEAD Most of the upcoming major risk for Gold will likely come from the Middle East this week. There won't be any significant data releases that could affect Gold and Silver prices for the remaining week. Today, the rise in the Dollar had minimal impact on Gold and Silver, as both commodities gained momentum. XAUUSD TECHNICAL OUTLOOK Gold has broken the descending trendline from mid-July and is experiencing an expansive rally. A daily close above $1950 is crucial for bullish continuation. Despite geopolitical factors, a close below $1950 could still lead to bullish continuation depending on risk sentiment. The $1950 level has been a significant area of resistance since August. The 14-day RSI is approaching overbought territory and may come into play if the rally continues tomorrow.