Photo by Dmitry Demidko on Unsplash

• Gold prices surged on Friday, trading at around $1,929.20, reflecting a gain of over 3% amidst the escalating Israel-Palestine conflict.
• The shift from aerial to ground operations in Gaza by Israel intensified geopolitical tensions, bolstering safe-haven assets.
• Deteriorating US Consumer Sentiment and dovish remarks from Philadelphia Fed President Patrick Harker applied pressure to US Treasury yields.

The price of gold sustained an outstanding rally on Friday as geopolitical tensions rose due to the conflict between Israel and Palestine. Traders seeking safety flocked toward the yellow metal amid the uncertainty, while the US dollar was also seen advancing. The XAU/USD was recently seen trading at around $1,929.20, with gains of more than 3%, after bouncing from daily lows of $1,868.69

XAU/USD Approached $2,000 as Investors Sought Safe Havens Amidst Geopolitical Strife and Deteriorating US Consumer Sentiment

XAU/USD found buyers as gold prices rose more than 3% on developments that Israel is shifting from air to ground operations in the Gaza strip, spurring fears the conflict could spill toward other regions in the Middle East. Consequently, safe-haven assets remained bid into the weekend, while the metal's chances of hitting the $2,000 mark seemingly increased.

Economic data from the United States revealed that Consumer Sentiment among Americans continues to deteriorate, according to the University of Michigan (UoM) October survey. Aside from this, Philadelphia Fed President Patrick Harker commented that no additional rate hikes “are likely” to be needed.

Consequently, US Treasury bond yields decelerated, particularly the US 10-year Real Yields, which remained at 2.289%, falling seven basis points. This followed the footsteps of the 10-year benchmark note, which yielded 4.629%, down 7 basis points.

The US Dollar Index (DXY) advanced 0.08% and sat at the 106.66 mark. This kind of movement is typically a headwind for gold prices.

XAU/USD Price Analysis: Technical Outlook

The gold rally witnessed the yellow metal climbing above the 20-, 50-, and 100-day moving averages (DMAs), with buyers targeting the 200-DMA at $1929.47. A decisive break of the latter could propel gold toward the $1950 psychological area before aiming toward a July 20 swing high of $1987.42.

Conversely, failure at the 200-DMA could expose XAU/USD to selling pressure and drag the precious metal towards the confluence of the 50-DMA and the $1900 figure.

(Click on image to enlarge)

XAU/USD Technical Levels

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