The rise in the price of the (considered a safe haven) asset was driven by:
→ escalation of geopolitical conflicts;
→ increasing US government debt and rising bond prices make gold a more attractive option for a defensive portfolio.
Also, according to Business Insider, global central banks are buying gold in an effort to diversify reserves away from the dollar.
Thanks to the bullish momentum, the price of XAU/USD has risen into the upper half of the downward channel that has been in effect in the market since late spring. If the bulls are able to reach its upper limit in a relatively short amount of time, this will be a prerequisite to consider that the channel is losing its relevance.
From a technical point of view, the price increase was facilitated by:
→ lower border of the channel;
→ level 1,820, where the bulls had control in March and confirmed it in October.
Can the rally continue? This will be prevented by:
→ desires of buyers to secure profits from a sharp impulse;
→ level 1,888 (former support);
→ psychological level 1,900 (for the same reason).
→ at current levels a sharp decline was recorded on September 27, so the imbalance in favor of offers may persist here.
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