Gold fell to its lowest level in five sessions on Friday, pressured by the dollar’s move higher and weakness in oil. Expectations the world's largest economy will improve steadily, coupled with growing view that the U.S. central bank will end the era of record-low interest rates, have been weighing on the precious metal for a pretty long time. There is broad consensus that the Fed is going to lift interest rates at its policy meeting next week.
The XAU/USD pair is trading at 1067.13, lower than the opening price of 1071.50. Prices dipped to as low as 1065.81 earlier in the Asian session but not surprisingly the market found some support here. As I pointed out in my previous analysis, the 1066/3 support is a strategic region for the bears to conquer if they intend to increase the downward pressure. In that case, it could be possible to see the XAU/USD pair testing the 1058 and 1054 levels.
To the upside, there are hurdles such as 1077.40-1077.06 and 1081.55 but the key resistance is quite a long way away, up at 1087. As you can see, the daily Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-period moving average, green line) lines are flat, indicating lack of real momentum. That said, I think the metal will be range bound until the market builds up enough momentum to break out either way.
