Gold prices rose for the fourth time in five days as investors continued to increase bets that the Fed will refrain from raising borrowing costs in the months ahead. The XAU/USD pair initially fell yesterday, testing the anticipated support in 1260/58, but bounced back up and passed through the 1266 level. As a result, the market advanced to the 1272.70-1270 zone as expected.
However, we ended up finding a bit of resistance and pulled back to the 1266-1264.21 area where the Tenkan-Sen (nine-period moving average, red line) sits on the 4-hour chart. If it holds the market, the bulls will probably make another attempt to revisit 1272.70-1270. Clearing this resistance could extend gains and pave the way towards 1280/77.
On the other hand, if the bears take over and prices drop below 1264, then we could head back to the 1260/58 area. The bottom the daily Ichimoku cloud sits not too far from there, at 1256, so the bears will have to drag prices below that in order to gain more strength and test the 1250-1247.62 zone. Closing below 1247.62 -which happens to be the daily Kijun-Sen (twenty six-period moving average, green line)- would indicate that 1240 will be the next stop.
