Gold prices ended Monday’s session up $4.43 as losses in global equities led investors to increase their safe-haven positions. This week sees a deluge of U.S. economic data so the search for clues to whether the Federal Reserve will hike rates at its June meeting is set to intensify this week.
The market is above the Ichimoku clouds on the daily and the 4-hourly time frames, plus the Tenkan-Sen (nine-period moving average, red line) and the Kijun-Sen (twenty six-day moving average, green line) are positively aligned, suggesting that the bulls still have the medium-term technical advantage. It looks like the market is going to make a trip back up to the 1261 resistance level, as long as the 1252/0 support remains intact. However, the upside potential will be limited until the resistance at around 1261 is broken.
A successful breach of 1261 would bring in 1265. The bulls will have to capture this strategic camp in order to gain momentum and challenge the bears on the 1277.35-1276 battlefield. Beyond there, the bears will be waiting in the 1287/4 zone. On the other hand, a successful drop below 1250 could foreshadow a move to 1242/39. If XAU/USD falls through 1239, then the 1235.30 level may be the next stop.
