By: DailyForex.com

The XAU/USD pair ended yesterday’s session higher, supported by strong Chinese manufacturing PMI data and geopolitical issues. The data out of China, which surpassed India as the biggest gold consumer last year, showed that preliminary index of manufacturing activity rose to 50.8 from 49.4 in May. U.S. housing data was above expectations but failed to have a lasting impact on the greenback.

It looks like the market is digesting last week’s gains while keeping an eye on the situation in Iraq. Gold has support from geopolitical issues but appetite for more conventional assets such as stocks could limit gold’s potential upside. Moving inside the Ichimoku clouds on the weekly time frame is another element which makes me not to expect a stellar performance from the shiny metal. Technically, the thickness of the Ichimoku cloud is important because the thicker the cloud, the less likely it is that prices will manage a sustained break through it. The thinner the Ichimoku cloud, a break through has a better chance.

XAUUSD Daily 62414

On the 4-hour chart, the market is trading above the Ichimoku clouds and that indicates there is more volume and strength behind the bulls at the moment. The first hurdle gold needs to jump is located around the 1324 level. However, there is significant resistance between 1328 and 1331. Therefore, only a sustained break above the cloud (daily chart) could extend the bullish movement towards 1351.50. If the bulls run out of gas and the market drops below the 1306 support level, I will look for 1300 - 1297. Breaking this support would suggest that the 1286 level will be the next stop.

XAUUSD Weekly 62414

Related Articles
  1. Investing Basics

    What is Convertible Preferred Stock?

    Convertible preferred stock is preferred stock that can be converted into common stock as of a predetermined date at a specified ratio.
  2. Economics

    Calculating the Consumption Function

    The consumption function shows the level of consumer spending as it relates to disposable income.
  3. Insurance

    Which Kind of Life Insurance Is Best for You?

    Parse the pros and cons of different policy types to ensure the best coverage for your needs.
  4. Insurance

    Explaining Co-Pays

    A co-pay is a set dollar amount an insured patient pays when visiting a doctor, filling a prescription, having tests performed or receiving other medical treatment.
  5. Investing Basics

    What Does Clawback Mean?

    A clawback occurs when money or benefits that have been distributed are taken back because of unforeseen or unusual circumstances.
  6. Economics

    Explaining the CAMELS Rating System

    Regulators use the CAMELS rating system to evaluate a bank’s level of risk and overall condition.
  7. Investing Basics

    Understanding Brokerage Fees

    Agents charge brokerage fees for facilitating transactions between buyers and sellers.
  8. Investing Basics

    What is the Theory of Backwardation?

    Backwardation occurs when the futures price of a commodity is lower than its market price today.
  9. Home & Auto

    Millennials Guide: How To Read a Lease

    Everything you need to know before you rent a home.
  10. Forex Strategies

    Two Great Currencies To Profit From Oil Volatility

    U.S. dollar crosses with Canadian and Australian dollars offer easy access to crude oil trends due to their tight correlation with energy futures.
RELATED TERMS
  1. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
  2. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  3. Earnings Before Interest & Tax ...

    An indicator of a company's profitability, calculated as revenue ...
  4. Implied Volatility - IV

    The estimated volatility of a security's price.
  5. Plain Vanilla

    The most basic or standard version of a financial instrument, ...
  6. Operating Cost

    Expenses associated with the maintenance and administration of ...
RELATED FAQS
  1. Can mutual funds outperform savings accounts?

    A mutual fund can – and should – outperform a savings account. In most cases, it should not even be a close race. Savings ... Read Full Answer >>
  2. Can mutual funds invest in private companies?

    Mutual funds can invest in private companies, which may come as a surprise to many investors. It is rare for a fund to have ... Read Full Answer >>
  3. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  4. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
  5. Why is my 401(k) not FDIC-Insured?

    401(k) plans are not FDIC-insured because they are typically composed of investments rather than deposits. The Federal Deposit ... Read Full Answer >>
  6. Can I use my IRA savings to start my own savings?

    While there is no legal reason why you cannot withdraw funds from your IRA to start a traditional savings account, it is ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
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!