Is Gold Heading Towards $1000? What Charts Say For the Week

Gold rallied more than 1.9% to a two-week high in the week to Friday as escalated tension in Iraq increased safe haven flows while physical demand got a boost after the sharp fall in the last week of May.

Geopolitical situation may improve in the coming weeks and the market will increasingly focus on policy signals from major central banks, analysts say.

The US Federal Open Market Committee (FOMC) will announce policy rates on Wednesday and with no surprise expected at the meeting, market participants will wait for Fed Chairwoman Janet Yellen's press conference after that.

Inflation data from the US, Eurozone and UK due this week will provide cues regarding the direction of rate changes in the respective economies and might influence global risk sentiment.

Despite the rise this week, the yellow metal is still holding a downtrend, both on a daily chart as well as weekly chart.

Near-term resistances shown by the daily chart are $1303.90 and $1331.15, a break of which will reverse the downtrend since mid-March. The next target on the higher side is $1392.08.

On the downside, the levels to watch are $1211.29 and $1182.15.

Weekly chart still pictures the reversal from the 2011 record and the metal has a medium term target near $1040 in it. The support near $1150 is unlikely to be strong enough to stop the downside journey.