Gold prices edged up yesterday as investors sought safety from tensions between Saudi Arabia and Iran and renewed stock market declines linked to concerns over China's slowing economy. The XAU/USD pair extended its gains but encountered around the 1081.55 level which I earlier pointed out as a key to higher levels. The U.S. economy is in focus today with trade balance figures and the ADP employment report coming up. The minutes from the last Federal Open Market Committee meeting is also scheduled for release today.
As you can see on the daily and 4-hourly charts, 1082 is the key level for the bulls to pass in order to challenge the bears at the 1089/7 battle field. Breaking through the resistance in the 1089/7 area could ease the pressure on the market and push prices towards the daily Ichimoku cloud. In that case, the 1094 and 1098 levels will be the next possible targets.
.png "XAUUSD Daily")
On the other hand, if the market fails to make a sustained break above 1082, prices will eventually pull back to test the 1070.76 - 1068 region which has been supportive. If the XAU/USD pair drops through 1068, where also the daily Kijun-sen (twenty six-period moving average, green line) reside, then the market will have a tendency to retest the support at 1064.50. A daily close below this level would suggest that the bears will be aiming for 1058.
