Gold, Brent Crude Oil News and Analysis

• Israeli tanks led a brief raid into Gaza overnight to “prepare the battlefield”
• Gold remains elevated, on track for a modest weekly rise as tensions remain high
• Brent crude attempts recovery but global growth concerns weigh on sentiment
• The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library

Israeli Tanks Led a Brief Raid into Gaza as Ground Offensive is Delayed

On Thursday night, tanks and troops crossed into Northern Gaza in what is expected to be preparations for a larger ground invasion. The Israeli Defence Force (IDF) said the ground raid was conducted to strike several military targets.

The move into Gaza territory was the largest incursion of the ongoing war but gold traders do not appear to be flooding back into the precious metal ahead of the weekend, or at least not yet. Over the last week four hostages have been released and Hamas now calls for a ceasefire to locate and gather hostages, the release of which will be contingent on a ceasefire.

Taking a look at the daily gold chart it is clear to see the slowdown in price appreciation around the $1985 level where a number of upper wicks signal a momentary reluctance to surge higher. Gold prices will be largely directed by the ongoing conflict with the potential to rise once again if the conflict extends into a broader regional fight. Therefore the current market posture may prove to be short-lived.

Levels of note to the upside include the $2010, which appeared as resistance earlier this year around the banking turmoil, and the all-time high around $2081.80. Elevated US yields have had little effect in containing recent advances as the yellow metal proved its value as a safe haven asset. Support remains at $1937 which coincides with the 200 SMA.

Gold (XAU/USD) Daily Chart

Source: TradingView, prepared by Richard Snow

30-day implied gold volatility has also dropped off in recent sessions but remains a long way from the low.

Gold Volatility Index (GVZ)

Source: TradingView, prepared by Richard Snow

Brent Crude Oil Attempts Recovery but Global Growth Concerns Weigh on Sentiment

The worsening outlook in Europe has oil traders doubting if global demand for oil will remain resilient heading into next year. European PMI data revealed continued fragility in both manufacturing and services sectors while the Bundesbank suggested Q3 is likely to reveal an economic contraction. That would mean that three of the last four quarters registered contractions.

Fiscal stimulus measures from China have been unable to revive risk sentiment particularly given that one of the country’s largest property developers, Country Garden’s was unable to meet debt repayments. On the other hand, the US continues to produce stellar economic growth via its Q3 GDP results which beat estimates. A high US dollar and uncertain economic outlook appears to be plaguing oil.

A considerable zone of confluence has emerged around the $89.00 level which coincides with prior channel support and the 50 simple moving average (SMA). $87 is the nearest intra-day level of support, followed by $82 which appears near the 200 SMA.

Brent Crude Oil Daily Chart

Source: TradingView, prepared by Richard Snow

Oil is a complex market that is inextricably linked to the forces of supply and demand but also has the potential to respond to geopolitical conflict in oil producing nations. Learn more below:

https://www.dailyfx.com/news/gold-oil-trajectories-lose-momentum-amid-threat-of-escalation-20231027.html