Gold prices ended Thursday’s session up $7.21 an ounce, snapping a four-day losing streak, as a retreat in the dollar sparked some short-side profit taking. Global stock markets were mostly higher yesterday. XAU/USD initially headed lower but the anticipated support at the $1321 level kicked in and pushed prices back above $1327.50. Consequently, the market returned to the $1333.30-$1332 area.
The Ichimoku cloud on the hourly chart occupies the area roughly between the 1332 and the 1336 levels, and it looks like it continues to act as resistance in the short term. We have positive Tenkan-Sen (nine-period moving average, red line) – Kijun-Sen (twenty six-period moving average, green line) crosses on both the H1 and the M30 charts, but prices are still below the 4-hourly and the hourly time frames. This suggests a range-bound movement in the near-term.
If XAU/USD fails to climb above 1333.30-1332, expect a pullback to the 1325-1324.50 zone. The bears have to drag prices below 1324.50 to challenge the strategic support at 1321. Once below 1321, the market will be heading to 1316. However, if the bulls can convincingly push prices above 1333.30, then we will probably revisit the daily Kijun-Sen sitting at 1336.45. The bulls have to penetrate this barrier to march towards 1342/0. A breakthrough there brings in 1345.
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