#Gold Technical Analysis# 24K99 News On Tuesday (September 24), due to the escalating tensions in the Middle East and deteriorating consumer confidence in the USA, enhancing the safe-haven appeal of gold, combined with the drop in US Treasury yields and the weak US dollar, the price of gold surged nearly $30 and hit a record high.

Spot gold closed at $28.59 on Tuesday, up 1.09%, at $2,656.97 per ounce. The price of gold reached a high of $2,664.18 per ounce during the session, setting a new historical high.

FXStreet analyst Christian Borjon Valencia pointed out that data provided by the Conference Board showed a deterioration in consumer confidence in the USA, leading to a new historical high in the price of gold in the North American market on Tuesday. This, coupled with the decline in US Treasury yields and the weakness of the dollar, has driven the increase in gold prices.

Valencia further added that the geopolitical tensions in the Middle East have also stimulated the safe-haven demand for gold, driving gold prices to new highs again.

Israel's air strikes on the Hezbollah positions in southern Lebanon and its declaration to continue the pressure have exacerbated concerns in the market about a full-scale war in the Middle East, causing gold prices to rise by 28% so far in 2024.

Bob Haberkorn, Senior Market Strategist at RJO Futures, stated that the current surge in gold prices is due to concerns about the situation in the Middle East leading to safe-haven buying. He believes that Iran may take further action, so gold will continue to hit new highs.

Haberkorn added, "If the situation in the Middle East escalates further and there are more rumors of rate cuts, gold could break through $2,700 per ounce as early as this weekend."

The Federal Reserve's easing of monetary policy has also boosted gold prices, as gold does not yield interest, and rate cuts can reduce the opportunity cost of holding gold.

Due to a large amount of funds flowing into gold etf, and major central banks expected to further lower interest rates, major investment banks predict that the record-breaking price surge in gold will continue until 2025.

Dramatic deterioration in consumer confidence in the usa.

On Tuesday, the Conference Board reported that with growing concerns about employment and business conditions, American consumers' views on the economy deteriorated sharply in September, with the consumer confidence index in that month experiencing the largest drop in over three years.

The Conference Board report stated that the US consumer confidence index plummeted from 105.6 in August to 98.7 in September, marking the largest single-month decline since August 2021. Respondents surveyed by Dow Jones had generally predicted the index to be 104.

Of the five components sampled, each performed worse in September, with the largest decline in confidence seen in the 35-54 age group with incomes below $50,000.

The Conference Board's Chief Economist, Dana Peterson, said: "Consumers' assessment of current business conditions turned negative, and their views on the current labor market conditions further deteriorated. Consumers are also more pessimistic about future labor market conditions, as well as future business conditions and income.

In addition to the sharp drop in confidence index, current situation indicators have also deteriorated: down 10.3 points from the previous month to 124.3. The expectations index fell by 4.6 points to 81.7.

Following the data release, US Treasury bond yields edged lower, with the 10-year US Treasury bond yield at 3.73%, down two basis points. At the same time, the US Dollar Index (DXY), which measures the performance of the US dollar against a basket of six currencies, fell to a two-day low of 100.48, a decrease of over 0.42%.

Israel launches intensive airstrikes, Iranian President issues a warning.

Israeli sources claim that on September 23, they launched a large-scale airstrike on 'Hezbollah targets' hitting over 1600 locations. Israel continued new airstrikes in multiple areas of Lebanon on September 24.

According to Agence France-Presse, sources from both sides confirmed that Israel launched airstrikes on the southern region of Beirut, Lebanon's capital, on September 24. Israel announced a new round of attacks targeting 'Hezbollah objectives.' Hezbollah stated that they fired multiple rockets at Israeli military bases.

Lebanon's Ministry of Public Health stated on September 24 that the continuous Israeli airstrikes the previous day in various parts of Lebanon resulted in at least 558 deaths (including 50 children and 94 women), 1835 injuries, with the vast majority of casualties being civilians.

According to Reuters UK, on September 23 local time, Iranian President Ebrahim Raisi stated in New York, USA that Israel aims to draw Iran into the almost year-long conflict between Israel and Hezbollah, dragging the Middle East into a 'full-scale war,' warning that the consequences are 'irreversible.'

When asked if Iran would intervene in the conflict between Israel and Hezbollah, Raisi did not provide specifics, only stating, 'We will defend any organization that safeguards its own rights and interests.'

On September 23 local time, Israel launched large-scale attacks on multiple locations in Lebanon, resulting in at least 492 deaths, marking the deadliest day in terms of casualties in Lebanon in nearly 20 years.

Two Israeli officials and a Western diplomat told the American news website Axios that with the escalating conflict between the militant group Hezbollah and the Israeli military, Hezbollah has recently urged Iran to attack Israel. However, Iran has so far exercised restraint.

An Iranian direct attack on Israel would greatly further destabilize the region and could potentially drag the usa into the conflict.

How to trade gold?

FXStreet analyst Christian Borjon Valencia pointed out that the gold outlook is biased towards upward movement, likely to continue hitting historical highs, although the rally seems a bit overextended. Traders are currently watching the $2700 per ounce level.

Valencia mentioned that momentum favors buyers; however, the Relative Strength Index (RSI) has now turned overbought, so buyers should beware of potential pullbacks.

Valencia stated that if the gold price continues its upward trend, traders may test $2675 per ounce, followed by $2700 per ounce. Next levels would be $2750 per ounce, and then $2800 per ounce.

(Spot gold daily chart source: FXStreet)

On the other hand, Valencia added that in case the gold price falls below $2650 per ounce, it could test the September 18 high of $2600 per ounce. The key support levels to be tested next would be the September 18 low of $2546 per ounce, followed by the 50-day Simple Moving Average (SMA) of $2481 per ounce.