Gold ended the week down by 2.15% at $1178.91 per ounce as gains in equity markets increased investors' appetite for risk and dented demand for safe-haven assets. The Nasdaq Composite and S&P 500 advanced to records on the back of encouraging corporate results from tech giants. As I pointed out earlier, market players do not see the need for gold in an environment of buoyant equities and subdued inflation.
The precious metal has been facing constant pressure due to expectations of an interest rate hike by the U.S. Federal Reserve some time this year, so the major focus of the new week is likely to be the Fed policy decision on Wednesday. Although prices fluctuated earlier in the week, the XAU/USD pair broke below the 1191 support and consequently headed to the 1174 zone. Falling through 1181 indicates prices will have a tendency to retreat towards the 1147 level but of course in order to reach there supports at 1166 and 1159 have to be broken. Despite the fact that medium term trend will continue torturing the bulls, I think the area between the 1147 and 1130 levels is a significant support and could attract some serious buyers, as it did in the past.
On the other hand, if the bulls successfully defend their strategic castle in the 1174/1 region, it is possible that we will see the market bouncing, testing the 1181 and 1186 levels. The bulls will need to take out the resistance at 1186 so that they can gain more traction and revisit the 1195/1 area where the daily Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-day moving average, green line) lines intersect.
