Gold prices rose for a sixth consecutive session on Thursday, hitting the highest level since November 29, as the dollar’s weakness persisted. XAU/USD reached the $1296-$1294 area as expected after the market broke through the resistance at $1288. Gold prices climbed nearly 5% since the market bounced up from the support at $1236, the confluence of a bullish trend line and the bottom of the weekly Ichimoku cloud.
The bulls have been dominating the market since prices passed through the Ichimoku clouds on the 4-hourly and the hourly charts. If prices can climb and hold above the 1296 level, the next target will be 1298. The area between the 1298 and 1302 levels has been troublesome in the past so clearing that resistance is essential for a continuation towards 1305.
However, if XAU/USD is unable to break above 1298, we may visit 1291.50-1290.40 or even 1288. The bears have to pull prices below 1288 to test 1286 and 1284. A break below 1284 suggests that the market will head back to 1281.
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