Gold prices ended yesterday’s session higher after minutes of the Federal Reserve’s June policy meeting failed to offer clues on the timing of rate hikes. Minutes from the June 17-18 meeting showed policy makers are planning to continue tapering and end the asset buying program before winter unless the economy deviates substantially from its expected path. The precious metal also drew strength from Federal Reserve Bank of St. Louis President James Bullard’s comments on inflation. Bullard said surprisingly fast gains in employment will fuel inflation. That could provide extra support for gold as an inflation hedge.

Yesterday the XAU/USD pair accelerated its advance and traded as high as $1331.65 an ounce after breaking above the interim resistance level of 1324. The pattern on the daily chart suggests that there is more volume and strength behind the bulls at the moment. Although I have been warning about the shiny metal’s resilience recently, I think the bulls will have to capture the critical resistance and push prices above the July 1 high of 1232.43 in order to challenge the bears on the next (1340/3) battlefield.

XAUUSD Daily 71014

However, if the bears defend their ground and prices start to fall, expect to see some support between 1324 and 1321. A daily close below the 1317 level could encourage sellers and drag the market towards 1312.

XAUUSD h4 71014

Related Articles
  1. Stock Analysis

    The Biggest Risks of Investing in Netflix Stock

    Examine the current state of Netflix Inc., and learn about three of the major fundamental risks that the company is currently facing.
  2. Mutual Funds & ETFs

    3 Fixed Income ETFs in the Mining Sector

    Learn about the top three metals and mining exchange-traded funds (ETFs), and explore analyses of their characteristics and how investors can benefit from these ETFs.
  3. Insurance

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  4. Mutual Funds & ETFs

    Mutual Funds Millennials Should Avoid

    Find out what kinds of mutual funds are unsuitable for millennial investors, especially when included in millennial retirement accounts.
  5. Professionals

    What Accounts for One-Third of the Wage Gap

    Women who work full time still make less than men who have the same qualifications. One third of the pay gap may be due to gender bias and discrimination.
  6. Budgeting

    How to Travel to Tokyo on a Budget

    Planning a trip to Tokyo? Here are a few ways that you can make the trip more affordable.
  7. Investing

    What's Behind the Decline in Productivity Numbers? 

    There are several theories and hypotheses about low productivity numbers in the American economy. This article examines some of them.
  8. Economics

    Should the Fed Be More Worried About Asset Bubbles?

    While the Fed should be concerned that assets bubbles might impact economic stability, monetary policy is not the best tool to mitigate this threat.
  9. Bonds & Fixed Income

    High Yield Bond Investing 101

    Taking on high-yield bond investments requires a thorough investigation. Here are looking the fundamentals.
  10. Retirement

    Retire on 70% of Your Income? Why It's Not Enough

    Many people think 70% will be enough to support them in retirement, but they forget a few significant expenses that could lurk in the future.
  1. Why have mutual funds become so popular?

    Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>
  2. Who do hedge funds lend money to?

    Many traditional lenders and banks are failing to provide loans. In their absence, hedge funds have begun to fill the gap. ... Read Full Answer >>
  3. Do mutual funds pay dividends?

    Depending on the specific assets in its portfolio, a mutual fund may generate income for shareholders in the form of capital ... Read Full Answer >>
  4. How can companies use the cash flow statement to mislead investors?

    Cash flow is a means for most investors to examine the actual economics of a business they might invest in, especially from ... Read Full Answer >>
  5. Can working capital be too high?

    A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
  6. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!