Gold Price Analysis- August 6, 2014

By DailyForex | Updated August 06, 2014 AAA

By: DailyForex.com

Yesterday’s candle confirms that there is an intense battle going on between the bears and bulls. Increasing demand for the American dollar is putting a pressure on gold prices but recent weakness in the major stock markets and geopolitical concerns are limiting the down side. The XAU/USD pair traded as low as $1282.45 after the Institute for Supply Management’s non-manufacturing PMI came in stronger than expected with a print of 58.7 but prices reacted with bullish sentiment after hitting that low and moved back up.

The gold market has been going back and forth for the last four days but eventually the market will soon reach a point where it will simply have to break one way or the other. Until a breakout occurs I think the market will remain range bound. Meanwhile, gold charts paint a mixed technical picture. Prices are inside the Ichimoku cloud on the weekly and daily time frames but the Tenkan-sen line (nine-period moving average, red line) is below the Kijun-sen line (twenty six-day moving average, green line).

XAUUSD Daily 8614

Basically, the overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. So speaking strictly based on the charts, I think it makes sense to watch the area between 1297 and 1277. In order to regain their strength and march towards the 1303 level, the bulls will have to push the XAU/USD pair above 1297. Breaking through the 1303 resistance level would make be think that we are going to revisit 1312. If the bears intend to dominate the market, a close below the 1280/77 support area would be necessary to gain enough momentum to tackle 1268.

XAUUSD H4 8614

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