The XAU/USD pair posted first weekly loss in seven weeks as some investors liquidated their positions after the market failed to break through the resistance located around the $1340 level. The pair traded as low as $1292.04 an ounce but Israel's ground offensive against Hamas militants in Gaza and the downing of a passenger plane in eastern Ukraine (near the Russian border) pushed prices up on Thursday. However, gains in U.S. equities on Friday soared the demand for disaster insurance and as a result gold prices settled at $1310.63.

Following a quiet Monday, the global economic calendar will be active for the balance of the week. Consumer price index data from the U.S. on Tuesday will be closely followed.

A strong reading might bolster the view that the Fed will lift rates off of zero sooner than anticipated. In other words, if inflation accelerates and the recent trend in the labor market continues, the market may start to price in new expectations.

XAUUSD Week 72114

From a technical perspective, I believe we will continue to see the effects of mixed technical outlook. While prices are still moving inside the Ichimoku cloud on the weekly time frame, the daily and 4-hours charts are pointing different directions. I think this week's trading range will be between 1324.50 and 1277. To the upside there will be hurdles in the way such as 1312/5 and 1320. If the bulls build some steam and break through 1324.50, it would be technically possible to see the XAU/USD pair revisiting the 1331.50 level. In order to gain more strength, the bears will have to drag the market below 1303. If that is the case, it is likely that the XAU/USD will be testing the supports at 1297 and 1292. Breaking below 1292 would suggest that we are heading back to the 1286 level where the top of the Ichimoku cloud sits on the daily chart.

XAUUSD Daily 72114

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