The XAUUSD pair had a positive day as weakness in the American dollar increased investors' appetite for gold and pushed prices for the precious metal to their highest close in two weeks. It appears that renewed geopolitical tensions between Russia and Ukraine also triggered some safe-haven buying that helped underpin gold. Yesterday, the pair traded as high as $1314.30 an ounce after the market passed through the 1307 barrier.
Today the gold market remains steady during the Asian session as most investors are waiting for the minutes of the Federal Open Market Committee meeting held on March 18-19. Fed’s policy meeting minutes -which will be released later today- may shed more light on plans to raise interest rates and provide some useful insight into what the voting members were thinking at that time.
From a technical point of view, although prices are still inside the Ichimoku clouds both on the daily and 4-hours chart, trading above the 1307 level is positive for the XAU/USD pair (Gold vs. the American dollar). As I mentioned yesterday, we also have a bullish Tenkan-Sen (nine-period moving average, red line) - Kijun-Sen (twenty six-day moving average, green line) cross on the 4-hour chart giving buyers an advantage.
With that in mind, I think the bulls will try to push prices above the 1314 level where the top of the Ichimoku cloud on the daily time frame currently sits. If the market climbs above yesterday's high, it is likely that the pair will test the first barrier located at the 1320 level. Once the pair clears 1320, more resistance will be waiting at 1328. However, if the bears defend the 1314 level and manage to drag the pair below 1307/5 area, then the next stop will probably be the 1298/3 support. Closing below this area would suggest that we will be revisiting the 1289/6 zone.
