FxWirePro- Sell Gold below $2640

Gold pared some of its gains despite escalation of tension in the Middle East. It hit a low of $2624 on Monday and is currently trading around $2643.

Geopolitical tension-

Iran, a pro-Hezbollah and Hamas militants launched dozens of missiles into Israel yesterday. The escalation of tension will increase the demand for safe-haven assets like gold.

US dollar index-

The surge in the US dollar index after the Iran and Israel attacks prevented the yellow metal from further gains.

Markets eye further development in the Middle East and US ISM services and Jobless claims data for further direction.

According to the CME Fed watch tool, the probability of a 25 bpbs rate cut in Nov decreased to 65.9% from 50.70% a week ago.

Technical (4 hour chart)-

The yellow metal trades above short-term (34 and 55 EMA ) and long-term (200- EMA) in the 4-hour chart.

The near–term support is around $2640, a break below targets of $2624/$2610/$2600/$2570/$2560/$2545/$2520/$2470. Major bearish continuation only below $2470.The yellow metal faces minor resistance around $2670 and a breach above will take it to the next level of  $2689/$2700.

Indicator (4- hour chart)

CCI (50)- Neutral

Average directional movement Index - Neutral

It is good to sell below $2640 with SL around $2650 for TP of $2624/$2600.