Gold prices ended yesterday's session higher after the mixed data out of the world's largest economy reinforced expectations that the Federal Reserve will not stop its aggressive asset purchases in the near future. Durable goods orders came in stronger than expected with a print of 4.2% but the Labor Department reported that the number of Americans filing first-time claims for unemployment insurance payments increased by 7000 to 343000. Despite a combination of gold supportive factors such as purchases by central banks and increasing demand for diversification, I will be paying more attention to technical levels, especially the daily and 4-hour charts. The pattern on the 4-hour time frame (and the fact that we broke above the ascending trend-line originating in May) suggests we are going to remain within the ascending channel which gold prices have been respecting since June 28. On the other hand, Ichimoku clouds on the daily chart represent a resistance zone and the bulls are coming closer to this major battlefield. From an intra-day perspective, since the XAU/USD pair is trading above the clouds and we have a bullish Tenkan-sen line (nine-period moving average, red line) - Kijun-sen line (twenty six-day moving average, green line) cross, I would prefer to be on the bulls' side. If the bulls continue to dominate the pair, we might test 1347, 1354.50 and 1365.80. To the downside, there will be support at 1321, 1310 and 1300. The 1300 level which converges with the bottom of the Ichimoku cloud looks supportive so the bears will need to capture this level in order to gain more strength and reverse the direction. A daily close below this level would certainly increase the bearish pressure.
