By: DailyForex.com

Gold prices rose %2.9 over the course of the week and settled at $1313.93 an ounce on Friday. It appears that the Fed’s dovish stance, a gas dispute between Russia and Ukraine and mounting tension in the Middle East lured investors back into the market. Friday’s data from the Commodity Futures Trading Commission (CFTC) showed that speculative traders on the Chicago Mercantile Exchange increased their net-long positions in gold to 78295 contracts, from 61127 a week earlier.

The XAU/USD pair had extended its gains and jumped to a nine-week high on Thursday after the bulls managed to shatter the 1286 resistance level and captured the first strategic fort at 1297. Currently the market is trading above the Ichimoku clouds on the 4-hour time frame and in addition to that we have bullish 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, indicating that the bulls are gaining strength since that the pair bottomed out around 1240. In other words, the odds will be favoring the bulls unless prices drop below 1286 again.

XAUUSD Week 62314

However, as I stated last week, now we entered the clouds on the weekly and daily chart, so I expect to see a consolidation period (range bound movement) in the near term. If the bulls break above last week’s high, they might find a chance to test the 1328/31 resistance area. I think closing above the Ichimoku cloud (daily chart) is essential for a bullish continuation towards 1351.50. On its way up expect to see resistance in the 1339/42 zone. If the bears take the reins and the XAU/USD pair starts to retreat, look for support at 1306. The bears will have to capture this point in order to challenge the bulls on the next (1300-1297) battlefield.

XAUUSD Daily 62314

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