Gold prices fell $5.26 an ounce on Tuesday, extending losses to a third straight session. Global stock markets were mostly firmer as investors moved into riskier assets. The Federal Open Market Committee’s two-day policy meeting kicks off today. No change in interest rates is expected at this meeting.
From a chart perspective, the bulls have the near-term technical advantage. XAU/USD is trading above the daily Ichimoku cloud; plus, the Tenkan-sen (nine-period moving average, red line) and the Kijun-sen (twenty six-period moving average, green line) are positively aligned. Technically, Ichimoku clouds not only identify the trend but also define the support and resistance zones. The bottom of the 4-hourly cloud converges with a horizontal support at around 1224 so keep an eye on there as it can trigger a push up to the hourly cloud occupying the 1232-1230.50 area. The bulls will need to penetrate the hourly cloud to revisit 1237/5.
However, if XAU/USD pierces below the 4-hourly cloud, the market will probably test the 1220.50-1219.50 zone. The bears have to capture this strategic camp to challenge 1216.50-1215. A break below 1215 implies that the market is targeting the 1213/1 area.