Gold Market Analysis:

Gold prices were trading in a tight range near recent highs in early Asian trade on Friday, October 18th, hovering around $2694.31 per ounce. Gold prices hit a record high of $2696.63 per ounce on Thursday, closing at $2692.75, as uncertainty surrounding the US presidential election and the ongoing conflict in the Middle East drove investors towards safe-haven assets.  A supportive monetary policy environment, characterized by expectations of further easing following the Federal Reserve's 50 basis point rate cut last month, also contributed to gold's strength.  Gold has surged more than 30% this year, repeatedly hitting new highs, fueled by the prospect of further Fed rate cuts and persistent geopolitical uncertainty.

US retail sales rose more than expected in September, with broad-based gains across various retail categories, indicating that robust consumer spending continues to support the economy.  Data released by the Commerce Department on Thursday showed that retail sales increased by 0.4% in September, exceeding expectations of a 0.3% rise and surpassing August's 0.1% gain.  However, gold prices retreated from record highs after the Labor Department reported a surprise drop in weekly jobless claims.

The European Central Bank also cut interest rates for the third time this year, by 25 basis points. While this contributed to a stronger US dollar, lower interest rates reduce the opportunity cost of holding gold, explaining the simultaneous rise in both gold and the dollar on Thursday.

Market participants will be watching for the release of US building permits and housing starts data for September, as well as any speeches from Federal Reserve officials.  Geopolitical developments will remain a key focus.

Gold Technical Analysis:

Daily Chart:The continuation of this week's upward momentum has pushed gold prices back above record highs, signaling a resumption of the bullish trend.  The bulls are clearly in control, with the short-term moving averages turning upwards and providing support. The MACD indicator is also in a bullish crossover above the zero line, suggesting further upside potential.  A break above the $2,700 psychological level is likely.

4-Hour Chart:Despite a dip towards the $2,600 support level earlier, gold prices have steadily recovered, highlighting the resilience of the bulls. The short-term moving averages have realigned in a bullish configuration, providing support for further gains.  The MACD indicator is also in a bullish crossover, reinforcing the positive outlook.  A strategy of buying on dips is recommended, with a focus on key psychological levels for potential upside targets.

Overall:The short-term outlook for gold favors selling on rallies with selective buying on dips.

Key Resistance Levels: 2705, 2710, 2715, 2720

Key Support Levels: 2690, 2680, 2675, 2670

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