The XAU/USD pair closed the session slightly higher than opening, but remained within the last 3 days trading range. Gold prices gained some ground against the greenback, after a series of weaker than expected economic data out of the United States increased investors' appetite for the shiny metal.
According to data released by the University of Michigan, the consumer sentiment index slipped to 71.8 from 77.6 and the New York Federal Reserve Bank said the Empire State manufacturing index dropped to 9.2 from 10. Recent price action indicates that market players are cautious ahead of the Federal Open Market Committee policy meeting. Headlines regarding the U.S. budget negotiations will also be in focus over the week.
Although the minutes of the Federal Reserve's last meeting showed growing debate within the committee about scaling back the current bond buying program, Chairman Bernanke and Vice Chairman Yellen see continuation of quantitative easing as necessary for a stronger economic recovery. On the 4-hour time frame, the XAU/USD pair trades above the Ichimoku cloud, but the 1598 level has recently been a cap on prices.
If the bulls shatter this barrier and get a close above the resistance zone of 1604, the most probable scenario is that we see prices testing the 1613 and eventually 1625 levels. To the downside, support will probably be seen at 1585, 1580 and 1572. If we break and close below 1572, sentiment will turn bearish once again. In that case, a re-test of 1555 won't be out of question.
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Spot Gold Futures: Strong Barrier At $1604 Levels
Published 03/19/2013, 07:11 AM
Updated 05/14/2017, 06:45 AM
Spot Gold Futures: Strong Barrier At $1604 Levels
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