The XAU/USD pair (Gold vs. the American dollar) scored a gain of 0.64% on increasing demand for protection against volatility in the global equities and turmoil in Ukraine. Although clashes between Ukrainian security forces and separatists triggered some safe-haven interest, gold gave up some of its gains after President Obama said the situation still can be resolved diplomatically. The initial reaction of market to the better than expected U.S. retail sales data was muted, but still it hindered the bulls' progress.
It seems that the bulls are struggling to gain momentum as the bears are working hard to defend the 1328 level during the Asian session today, so it is technically possible to see some retracement. If that is the case, support can be found around the 1321 level which happens to be the 38.2 Fibonacci based on the bearish run from 1392.04 to 1277.60. The bears will have to drag price below this support in order to test the 1315 level where the Kijun-sen line (twenty six-day moving average, green line) resided on the 4-hour time frame.
Breaching this floor would suggest that the bear will be aiming for 1312 and 1307 next. To the upside, I think the bulls might have a chance to tackle the 1334.50 level if they manage to break and hold 1328. Since this area offered resistance in the past, the bulls will have to break through in order to challenge the bears at 1342.30. A daily close above this barrier would indicate that the market is heading towards 1351.50. Today sees release of several important economic reports such as CPI and Empire State manufacturing index as well as Fed Chair Yellen's remarks at a financial conference, so expect some volatility.
