On Monday (October 28th) during the European trading session, spot gold slightly fell back, with a current price of about $2740 per ounce. Despite the overall downward trend, it has rebounded from the intraday low. Since last weekend's short opening, gold prices have fallen to $2724.64 per ounce in the Asian market, breaking this week's low. This trend reflects the escalating tensions in the Middle East and the market's wait-and-see sentiment towards US data.

Market background and latest market trends

After the opening on Monday, spot gold prices remained below $2750 per ounce, indicating the market's cautious attitude towards short-term trends. Renowned analyst Dhwani Mehta pointed out that the current gold price is significantly affected by technical support levels, and the market has a strong "buy on dips" trading sentiment towards gold. From a technical perspective, as long as the price stays above the key 38.2% Fibonacci level, there is still room for support for buying on dips. However, if the gold price falls below the 23.6% Fibonacci support level of $2723 per ounce, it may further explore lower support areas.

On this trading day, there were no major data releases on the US economic calendar, so the trend of gold was mainly influenced by external risk factors, especially the possible release of US economic data and geopolitical tensions later this week. The market's concerns about the situation in the Middle East have heightened risk aversion, keeping gold within a relatively strong support range.

Technical Analysis: Support and Resistance

1. Support level: The main technical support level in the current market is focused on $2723 per ounce, which is the 23.6% Fibonacci retracement level of the rebound trend from the low of $2604 per ounce on October 10 to the historical high of $2759 per ounce. If the gold price cannot hold the key support level of $2723 per ounce, the next target is the 38.2% Fibonacci support level, which is $2700 per ounce. The support here may be strong and also receive attention from market traders. Looking further down, Mehta pointed out that the 50% Fibonacci support level is at $2681 per ounce, which happens to be near the 21 day simple moving average. Once this support level is challenged, it may trigger a deeper pullback.

2. Resistance level: If gold can maintain above the 23.6% Fibonacci support of $2723 per ounce, the market may see gold retest the psychological level of $2750 per ounce. This price has become an important technical resistance for this week, and if it can be successfully broken through, the upward target will shift towards the historical high of $2759 per ounce. Mehta pointed out in his analysis that although the 14 day Relative Strength Index (RSI) of gold prices has fallen, it remains stable above 50 and is currently around 64, indicating that there is still some buying power in gold at low levels.

News and market sentiment

This week's gold market is clearly strongly influenced by international geopolitical risk factors. As tensions continue to escalate in the Middle East, investors have generally increased their safe haven allocation to gold. However, given that US economic data may have an impact on the Federal Reserve's expectations of interest rate hikes, the market still maintains a cautious wait-and-see attitude towards the data to be released later this week.

The performance of the gold market is not completely independent, but is influenced by the superposition of multiple factors. In the environment of continuous risk events, the market's old fogies are more inclined to build positions at low points rather than chasing high. Mehta pointed out that if risk sentiment does not significantly ease this week, risk aversion may further intensify, especially in the absence of important economic data guidance, and geopolitical factors will become an important driving force affecting the short-term trend of gold.

Attention should be paid to the support level of $2723 per ounce. It may be a rational choice to continue holding long positions in the absence of effective support being breached. Once it falls below, attention should be paid to support reactions around $2700/ounce or even $2681/ounce. If market sentiment improves or gold prices hold at the support level of $2723 per ounce, the short-term target is set at around $2750 per ounce.

Overall, the current gold market is driven by geopolitical and safe haven sentiment, but whether from a technical or news perspective, the stability of short-term support levels is crucial. The future monetary policy path of the Federal Reserve and global risk trends will still affect the medium - to long-term direction of gold, and the market is closely monitoring the upcoming economic data.