Gold prices rose for the first time in four sessions and settled at $1289.76 an ounce as a softer dollar lent some support to the precious metal. XAU/USD traded as high as $1291.06 after the bulls pushed prices above the $1284-$1282 zone. Currently the market is in the process of testing this area as a support.
Prices are moving within the borders of the Ichimoku clouds on the daily and the 4-hourly charts, suggesting that the market is looking for a direction. The Tenkan-sen (nine-period moving average, red line) and the Kijun-Sen (twenty six-period moving average, green line) lines are flat. However, note that the Tenkan-sen and the Kijun-Sen are negatively aligned – i.e. the downside risk remain.
If the market drops below the bottom of the daily cloud, then it is likely that the market will visit the 1276/5 area. The bears have to eliminate this support to make an assault on 1272. A successful break below 1272 could see a fall to 1264. To the upside, keep an eye on the intra-day resistance at 1288. A break through there paves the way for a test of the 1292 level. Beyond there, the bears will be waiting in the 1297/6 zone.
