Gold prices rose $7.79 an ounce on Thursday as the dollar softened despite better-than-expected U.S. inflation data. XAU/USD traded as low as $1316.54 before tripping back up to the $1334.30. The key levels remain unchanged, as the market continues to move between the 1334.60-1332 area on the top and the 1318-1316.50 area on the bottom.

The market is trading inside the Ichimoku clouds on the 4-hour chart but note that yesterday's price action pushed prices above the hourly cloud. The short-term charts suggest that a test of 1339/8 is likely if XAU/USD is able to climb and hold above 1334.60.

To the downside, the initial support sits in the 1327/4 zone, which is occupied by the Ichimoku cloud on the H1 chart. The bears have to pull prices below 1324 so that they can pay another visit to 1318-1316.5. If this support gives way, the 1312 level will probably be the next stop.