The XAU/USD pair touched its lowest level in a week near $1303 during yesterday's session but gained traction with the precious metal finding demand as a safe-haven in this risk-averse environment following several releases on the economic front. Major European equity indexes on Thursday fell sharply after the ECB's monthly bulleting and the BoE's Quarterly Inflation Report. Escalating fears over a global economic slowdown also weighed on the market sentiment. Given the present economic uncertainty, the recent US government shutdown, and all the fear surrounding global economic growth and talk of inflation, the precious metal might have a good chance of rallying up in the next few days.
Gold prices retreated during yesterday's session from 2 weeks highs before finding support by the 1303 level. Surging from that point, the price could not settle above the 1310 level as it faced some strong resistance in that area, printing a lower high with lower low to create another flag as we can see on the chart. We expect the 1300 level to be tested before we see the continuation of the uptrend.
Support: 1307.09 / 1300.00
Resistance: 1316.78 / 1326.20