Gold prices ended Tuesday nearly unchanged, after a volatile day that saw prices swing between gains and losses. The XAU/USD is currently trading at $1263.90, higher than the opening price of $1261.39. The key levels I mentioned in my previous analysis are still valid as the market is trapped in a narrow range of around $5. Trading volumes will begin to dwindle as the week progresses ahead of the Christmas holiday.

From a chart perspective, the first upside barrier comes in at 1265. If the market can cleanly break above the 1265 level, the bulls will be aiming for 1271/69. Closing above 1271 could provide the bulls some extra fuel they need to reach the next barrier at 1276.

However, if the bears successfully defend 1265, keep an eye on the 1260/59 area. Breaking down below the 1259 level could put some pressure on the market and increase the possibility of an attempt to revisit the support in the 1256.50-1255 area. The bears have to drag prices below 1255 in order to make an assault on 1251-1248.50.