On Monday (October 15th) during the European and American trading session, spot gold staged a "high platform diving" act, with the gold price plummeting nearly $23 from its peak. According to American media reports, Israel may avoid attacking Iran's crude oil infrastructure, which alleviates concerns about tensions in the Middle East,打压ing safe-haven buying of gold.

In the early European session on Monday, the spot gold price once touched $2,666.81 per ounce, setting an intraday high. However, the gold price then plummeted significantly, with the lowest point in the New York session falling to $2,643.99 per ounce.

As of the close of trading on Monday, spot gold fell by $8.43, a decrease of 0.32%, closing at $2,648.50 per ounce.

FXStreet analyst Christian Borjon Valencia noted that, due to the continued rise of the US dollar, the gold price fell after touching an intraday high of $2,666 per ounce on Monday.

The US Dollar Index (DXY), which tracks the value of the dollar against a basket of six currencies, rose by 0.38% to 103.30, the highest level since early August 2024.

Valencia stated that, at the same time, geopolitical factors will continue to play a role in citing gold. Media reports revealed that Israel began to convene security meetings to decide how to respond to Iran and Hezbollah's attacks in Tel Aviv.

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The United States focused on Monday, citing two informed officials, saying that Israeli Prime Minister Benjamin Netanyahu told the Biden administration that he was willing to strike Iran's military facilities, rather than oil or nuclear facilities.

On Monday, US officials were quoted as saying that Washington sees this as a sign of Israel's restraint in retaliating against Iran's missile attacks. The United States is concerned that if Israel attacks Iran's oil or nuclear facilities, it could trigger a larger-scale war.

It now seems to be attributed to Biden's diplomatic victory. The report said: "This US official, in describing the call between the two leaders, said that Netanyahu's attitude in this discussion was more moderate than before. Both officials said that after Biden decided to send a powerful missile defense system to Israel, the stance of the Israeli Prime Minister noticeably softened."Affected by the report, the market's risk-aversion sentiment cooled on Monday, which hit the safe-haven buying of gold and intensified the gold price correction trend.

Phillip Streible, Chief Market Strategist at Blue Line Futures, stated that gold faces many minor resistances, including a stronger US dollar, a weaker euro, weaker base metals, and profit-taking. A stronger US dollar makes gold more expensive for holders of other currencies.

Investors will also pay attention to the remarks of Federal Reserve officials this week to gain more hints about the upcoming rate cut and US retail sales data.

Traders estimate that the probability of the Federal Reserve cutting rates by 25 basis points at the November meeting is about 82%. Since gold does not bear interest, a lower rate can reduce the opportunity cost of holding gold, increasing investment interest.

Joseph Cavatoni, Market Strategist at the World Gold Council, said that geopolitical tensions and global gold promoters (Western investors) are still actively working to support gold prices.

How to trade gold?

Christian Borjon Valencia, an analyst at FXStreet, pointed out that although the gold price has retreated from around $2660 per ounce to the $2650 per ounce area, the upward trend remains unchanged. The momentum is bullish, as shown by the Relative Strength Index (RSI), but the RSI has slightly declined, indicating that some selling pressure still exists.

According to Valencia, if the gold price stays below $2650 per ounce, it may pave the way for further downside. The next key support level for gold will be $2600 per ounce. If the latter is breached, it will target the 50-day simple moving average (SMA) at $2550 per ounce.

On the other hand, Valencia added that if the gold price effectively breaks through the high of $2670 per ounce on October 4th, it may pave the way to challenge the high of $2685 per ounce this year, with the next target being the $2700 per ounce milestone.At 08:53 Beijing time on October 15th, the spot gold price was reported at $2,648.51 per ounce.