By: DailyForex.com

After three consecutive days of gains, the XAU/USD pair (Gold vs. the American dollar) hit the highest level in twelve days. Yesterday the pair broke through the 1268 resistance level as disappointing U.S. economic data and escalating violence in Iraq burnished the precious metal’s safe-haven appeal. Data released from the Commerce Department showed that retail sales rose only %0.3 in May and the Labor Department reported that the number of first-time applicants for jobless benefits increased by 4K to 317K. Some investors abandoned stocks and flocked to the gold market after President Barack Obama said he won't rule out U.S. military action in Iraq against militants.

XAUUSD Daily 61314

It looks like heightened risk aversion is likely to provide support to gold in the short-term but now prices are approaching to the 1277 level which could trigger some profit taking. This level had been a bottom for the market during April and May so I think it will be a tough nut to crack. Beyond this barrier, there will be significant resistance at the 1286(8) level where the descending line and 50% retracement (based on the distance between 1182.35 and 1392.04) coincide. Only a sustained break above 1288 could extend the bullish movement towards the 1297 level which happens to be the bottom of the Ichimoku cloud on the daily time frame. However, if the market encounters strong resistance around the 1277 level and prices start to fall, support can be found at 1268 and 1260/56.

XAUUSD H4 61314

Related Articles
  1. Stock Analysis

    Analyzing Johnson Controls’ Return on Equity (ROE) (JCI)

    Understand Johnson Controls' return on equity and the key drivers of profitability from an historical perspective and relative to its competitors
  2. Home & Auto

    Tax Breaks For Second-Home Owners

    The tax rules on a second home vary, depending on how the property is used.
  3. Trading Strategies

    Short Interest: What It Tells Us

    A stock’s short interest is the total number of shares that investors have sold short but have yet to close.
  4. Investing Basics

    ROA and ROE Give Clear Picture Of Corporate Health

    ROE indicates if a company’s value is growing at an acceptable rate. ROA reveals how much profit a company earns for every dollar of assets.
  5. Trading Strategies

    Mastering Short-Term Trading

    The proper application of a few different tools can help a short-term trader succeed.
  6. Home & Auto

    Ins And Outs Of Seller-Financed Real Estate Deals

    Seller financing works like this: Instead of a buyer receiving a loan from a bank, the person selling the house lends the buyer the money for the purchase.
  7. Insurance

    Indexed Universal Life: Flexibility and Safety

    A universal life insurance policy is a flexible form of permanent life insurance that offers the low-cost protection of term life with a savings element.
  8. Options & Futures

    How To Sell Put Options To Benefit In Any Market

    Selling a put option is a prudent way to generate additional portfolio income and gain exposure to desired stocks while limiting your capital investment.
  9. Economics

    How To Prepare For Rising Interest Rates

    Ignoring interest rates is a mistake because there are many ways to increase your income as they start to rise. The key is to be ready to act.
  10. Investing Basics

    How To Invest In Private Companies

    Owning a private firm means sharing more directly in the underlying firm’s profits.
RELATED FAQS
  1. How liquid are BlackRock mutual funds? (BLK)

    BlackRock, Inc. (NYSE: BLK) mutual funds are very liquid, as are all mutual funds. An investor receives payment for a redemption ... Read Full Answer >>
  2. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  3. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  4. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  5. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  6. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center