XAUUSD is likely to break the current resistance level

12 paź 2023

Gold prices on the international market skyrocketed in the context of the Hamas-Israel conflict, which could adversely affect the security situation in the Middle East, negatively impacting the world economic outlook.

Around the world, there are many warnings about the unpredictable dangers from the conflict between Hamas and Israel.

Currently, Israel has completely blockaded the Gaza Strip, cutting off the supply of electricity, water, food... More than 2.3 million residents in Gaza are facing a life of deprivation.

In a statement on October 10, San Francisco Fed President Mary Daly maintained the view that high bond yields will do the tightening work on behalf of the Fed. This is another sign that the Fed is likely to pause interest rate increases at its meeting later this month.

The market is also reflecting the very low possibility of the Fed raising interest rates.

Mr. Raphael Bostic, President of the Atlanta Fed, also said that the Fed does not need to make another interest rate hike and that policy has been tightened enough to bring inflation to the 2% target.

According to Mr. Bostic, there will be no surprises in the near future. The conflict in Israel could increase instability in the global economy and the Fed needs to be flexible and ready to adapt to the changing context.

Minneapolis Fed President Neel Kashkari said that the Fed is on track to control inflation without pushing the economy into recession.

With recent developments, it is likely that the Fed will temporarily stop raising interest rates. This in the short term will cause the USD to cool down, thereby pulling gold prices up.

In the medium and long term, the Fed may reverse monetary policy. The USD will fall even faster. Gold may also increase thanks to increased demand for gold in other countries.