Gold eased on Thursday as investors cashed in some of the previous day's 1.4% gains, though expectations that the Federal Reserve is not gearing up to raise interest rates anytime soon served to keep prices above $1334 an ounce. On the economic data front, the Labor Department reported that the number of first-time applicants for jobless benefits rose by 14K to 266K. The XAU/USD pair initially tried to break through the resistance at $1344 but the market's inability to hold above this level caused prices to reverse. As a result, we returned to the $1335/4 support zone, which was reinforced by the top of the Ichimoku cloud and the Tenkan-sen (nine-period moving average, red line) on the 4-hour chart.
XAU/USD is currently trading at 1337.10, up 0.15% from the previous close. The market is above the Ichimoku clouds on the weekly, daily and 4-hour charts, suggesting that there is the possibility of further price gains. Positively aligned Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-period moving average, green line) lines also improve the medium-term picture.
However, as I warned in my previous analysis, 1344.40 is the key level for the bulls to pass in order to challenge the bears on the battlefield in the 1256/2 region. Climbing above this barrier could signal a push up to 11364. To the downside, the initial supports is located at 1334 (the Tenkan Sen on 4-hour chart), followed by 1328.95 (the Kijun Sen on 4-hour chart). If the market successfully drops below 1328.95, then 1324 and 1320 may become the next targets. The bears will have to drag prices below 1320 if they intend to put extra pressure on the market and make an assault on the 1314 level.
