Gold prices rose $6.13 an ounce on Wednesday, hitting the highest level in three weeks, as concerns over U.S. tax reforms weighed on the dollar. XAU/USD extended its gains after the market saw an upside breakout from a sideways trading range, but it found heavy resistance just below the $1288 level. XAU/USD is currently trading at $1281.44, lower than the opening price of $1281.55.

From a chart perspective, trading above the Ichimoku clouds (on the H4 and H1 charts), along with positively aligned Tenkan-sen (nine-period moving average, red line) and Kijun-sen (twenty six-period moving average, green line), indicate that the bulls have the short-term technical advantage. However, the market has to climb back above 1283.50 in order to retest the resistance at 1288. If this resistance is broken, the bulls will be targeting 1292 next.

To the downside, the initial support sits in 1280/78, occupied by the Ichimoku cloud on the M30 chart. The bears will need to drag prices below there if they intend to challenge 1274/3, where the 4-hourly and hourly clouds overlap. A break down below 1273 opens up the risk of a move to 1267.