The XAU/USD pair had three bearish days in a row as the American dollar continued to gain strength. Demand for the greenback increased after the U.S. GDP report beat estimates and the Federal Reserve announced a sixth straight $10 billion cut to its asset-purchases program. Data released by the Commerce Department showed that the world's largest economy grew at an annual rate of 4% in the second quarter. Although policy makers stayed on course to end the purchase program in October, they repeated that "it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends".

While the U.S. economy is doing well, the risk on attitude will have a negative impact on the precious metal. However, the gold market still remains vulnerable to flare-ups in geopolitical concerns. But of course "the news doesn't make the market, rather the market makes the news" so I will be sticking to the charts as always. The XAU/USD pair currently trading at the 1295.49 level and I think the key levels to watch will be 1292 and 1303/6.

XAUUSD Daily 73114

We have bearish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) crosses on both the daily and 4-hour charts. So speaking strictly based on the charts, a daily close below the Ichimoku cloud (the 1283 level) will likely mean a stronger bearish push downward is on its way. If that is the case, I think the bears will be targeting the 1277 support level next. On the other hand, if the market forms a bottom and turns north, the first challenge will be waiting the bulls in the 1303/6 zone. Climbing above the 1306 level might provide them the power they need to revisit 1312.

XAUUSD H4 73114

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