Gold prices rose slightly during yesterday's session and closed the day at $1312.24 an ounce. Investors continue to watch geopolitical events but some people don't expect contagion to major markets. However, the news of increased violence in Gaza and speculations that EU leaders will consider further sanctions on Russia this week were enough for the bulls overtake the bears.
Although recent developments in the Middle East and Ukraine have been limiting the down side, we see bearish pressure from strong global equities markets and growing perception that
the U.S. Federal Reserve will begin to raise interest rates sooner than expected. It seems that gold market will be range bound over the medium term while we lack a real catalyst to push prices in either direction. So far, demand for disaster insurance had little lasting impacts on gold.
During today's Asian session the XAU/USD pair is still trading between the Tenkan-sen (nine-period moving average, red line) and Kijun-sen (twenty six-day moving average, green line) on the daily time frame and as you can see both lines are flat at the moment. If the bulls intend to charge, they will have to climb above yesterday's high which also happens to be the top of the Ichimoku cloud on the 4-hour time frame. In that case, they might have another chance to tackle the 1324.50 resistance level. A daily close beyond this zone could lure some investors back to the market and increase the possibility of a bullish attempt to test 1331.50.
If the bulls fail to hold prices above the 1303 level, we could go back to the support at 1297. A break below 1297 would indicate that the bears are going to aim for 1292 and 1286.
