Gold prices ended Wednesday's session up $8.29 an ounce as investors sought haven assets amid a weaker tone in riskier markets. World stock markets were mostly weaker yesterday. U.S. equity markets closed lower as declines in technology and internet stocks weighed on the main indexes. A lower U.S. dollar index also worked in favor of the gold bulls. In the latest economic data, the consumer price index came out in line with expectations.
XAU/USD was able to climb above the 1208 level after the anticipated support at 1198 kicked in and pushed prices higher. Consequently, the market reached the 1218-1216.50 area before giving up some of its gains. It looks as if the market is going to revisit the 1208 level before heading higher towards 1214-1213.50.
The bulls have to lift prices above 1214 to gain momentum for a retest of 1218-1216.50. A break through there could trigger a push up to the 1227/4 zone. The bears, on the other hand, have to drag prices below 1208 to challenge 1205. If XAU/USD falls through 1205, look for further downside with 1201.64-1200 and 1198 as targets. A break below 1198 indicates that the market is about to test the support in the 1195/3 area.
