Global markets shaken by Middle East tensions: will gold set a new high for 2023?

As global eyes fixate on the intensifying situation in the Middle East, financial markets are experiencing a contagion of anxiety, reflected distinctly in gold and oil prices, as well as the Volatility Index (VIX). The unrest partially eased following last week's mayhem, but the mood remains taut as developments unfold. 
 

Gold Prices: Predictions Amid Uncertainty 
 

In the economic backdrop, gold (XAUUSD) has behaved as the classic refuge amid uncertainty, soaring from $1,810 to $1,933 per ounce in just over a week. Technical analysis suggests a wedge pattern, potentially building toward a significant $2,131 pinnacle, contingent on further escalations in the Middle East and a break to the September 20 high of $1947.55. 
 

However, considering the near-vertical recent rise, the precious metal's trajectory might not be linear, necessitating a possible consolidation or retracement as investors catch their breath and reassess. 
 

Oil, the VIX, and potential market repercussions 
 

Not to be overshadowed, Brent oil (BRENT) prices persist in their ascent, anchored by the October low of $83.42, underscoring the broader inflationary concerns shadowing the global economy. Simultaneously, the VIX, or fear gauge, has punctured its own ceilings, achieving peaks not observed since May 2023. A potential 50% surge looms, aligning with burgeoning worries of the conflict's spill-over. This trio of trends - escalating gold, advancing oil prices, and a climbing VIX - signal potential downturns for major indices like the S&P 500 (SPX500). 
 

Depending on how the situation unfolds in the Middle East and the subsequent reaction from other nations, the global economy may experience a significant impact. 
 

Gold daily chart 
 

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