The XAU/USD pair (Gold vs. the American dollar) closed the session slightly lower than opening but remained within the last six days trading range. Prices have been moving above the Ichimoku cloud on the 4-hour time frame for some time but the bears' camp at 1486 is blocking the bulls' way. Between Fed’s unlimited money printing, ECB's dovish stance and mounting tension in the Middle East, gold will be appealing.
However, the major stock markets and USD/JPY are still running higher and this persistent rally has kept asset allocations moving out of gold and into stocks. In the short-term I think that the price action will be limited until we manage to leave this consolidation (1486-1444) area completely. Based upon the measurements, departing from this zone could take us to either 1532 or1398. To the upside, there will be hurdles in the way such as 1498 and 1511. Failure to break above the 1486 resistance within this week could bring sellers back to the market. If the bears continue to push downward and prices drop below 1444, I will be looking for 1430, 1411 and 1398. Once below 1398, there is little to slow this pair down until we reach the next key support at the 1363 level. In the meantime, I would suggest sitting on the sidelines until a clear direction is evident.
