Gold prices ended Thursday’s session up $5.44 an ounce, extending gains from the previous session, as the dollar fell after minutes from the European Central Bank’s December meeting hinted that the central bank may trim its massive monetary stimulus sooner than the markets had expected. XAU/USD is currently trading at $1291.52, higher than the opening price of $1294.40, but the upside potential may be limited as investors wait for December consumer-price index and retail sales data.

The short-term charts suggest that the bulls have the medium-term technical advantage. XAU/USD was able to stay above the Ichimoku clouds on the H1 chart as the bulls defended their camp at 1316. To the upside, the 1335-1332.20 area stands out as the initial barrier. A successful breach of this key resistance would attract new buying. In that case, the market will be aiming for 1340 next.

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However, if the bears increase pressure ahead of U.S. data, XAU/USD may revisit the 1326.20-1325.50 area. A break below there could send prices back to 1324-1323.80. The bears have to drag prices below 1323.80 to test 1320 and 1316. Closing below 1316 on a daily basis indicates that XAU/USD is on its way back to 1308.

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