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Forex pairs in this Article » XAU/USD
By: DailyForex.com

Gold lost ground against the American dollar and closed the day at $1256.54 an ounce. Recent price action shows that market players took a cautious stance and liquidated some of their positions ahead of the Federal Open Market Committee policy announcement. In the latest economic data, the Conference Board’s consumer confidence index came in at 80.7, up from the previous month's 77.5 and above expectations for a reading of 78.3, but the report released by the Commerce Department showed that demand for durable goods slumped in December.

According to yesterday's data orders for durable goods fell 4.3%. Although the precious metal faces pressure due to expectations that the Federal Reserve will announce another round of tapering to the quantitative easing program, the market is trapped in a relatively tight range at the moment. As I stated in my previous analysis, the biggest influence on gold prices will be the performance of the equity markets so the calmer tone of these markets may change the investors' sentiment.

XAUUSD Daily 12914

On the daily chart, the XAU/USD pair is moving inside the Ichimoku clouds and that indicates there is an intense battle going on between the bears and bulls. From an intra-day perspective, the key levels to watch will be 1268 and 1245. It is quite possible that the pair will gain some traction if it can push through the first critical resistance at 1268. If that is the case, I think the 1278 and 1286 resistance levels will be tested. However, if prices resume the bearish tone of the last few days and successfully drop below 1245/2, then I think we might revisit the 1235 support level. Breaching this support would suggest the bears will be aiming for 1227.40 - 1224.80 next.

XAUUSD H4 12914

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