Gold gained ground against the American dollar during Wednesday's session as the prospect of Russian military aggression on Ukrainian territory bolstered the precious metal's safe haven appeal. The XAU/USD pair extended its gains and produced a bullish candle after it pulled itself out of the bears' grip and broke above the 1297 resistance level. Gold prices reached $1309.46 an ounce yesterday, the highest level in 6 session, before pulling back slightly to $1306.
Yesterday's price action pushed the market back above the Ichimoku cloud on both the daily and 4-hour time frames. As a result, the Tenkan-sen line (nine-period moving average, red line) is moving above the Kijun-sen line (twenty six-day moving average, green line) on the 4-hour chart. The Chikou span (brown line), which climbed above prices, also indicates higher prices will come.
Today the gold market remains steady during the Asian session as market players are waiting for the Bank of England and European Central Bank to announce their latest policy decisions. If the XAU/USD pair resumes its bullish sentiment and penetrate the barrier at 1312 (1312.24), the bulls may find a chance to test the 1318/24.50 area. However, if prices encounter heavy resistance and start to retreat, expect to see support at 1303 and 1297. In the meantime, watch the headlines from the Eastern Europe.