The XAU/USD pair tried to break below the 1293 support level but the bulls managed to defend their camp, as a result prices climbed back to the 1300 level. In other words, at the end of the day we were back to where we started, indicating that the bulls and bears are roughly in equal balance at the moment. It appears that caution over the situation in Ukraine is limiting the down side.
Gold also drew strength from Federal Reserve Chair Yellen's comments on the Federal Open Market Committee's commitment to maintain the appropriate degree of accommodation to support the economic recovery. However, better-than-expected economic data from the U.S. could push money back into the equities markets. Looking at the daily and 4-hour charts from a purely technical point of view, the odds favor a range bound movement.
Prices are moving inside the Ichimoku clouds on both time frames but we also have bearish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) crosses. With that in mind, I think the key levels to watch today will be 1307.56 and 1296. It is quite possible that the XAU/USD pair will gain some traction if it can push through resistance at 1307.56. In that case, I think the 1312 resistance will be tested again. If the bulls capture this strategic point, their next target will be 1316. If the bears increase the downward pressure and prices break below 1296, the market will probably test the 1293 support again. Below that level, support can be found at 1286.
