Examining the movement of the price of gold in trading yesterday saw the price drop tracing to the support level during the jump earlier last week.
On the XAU / USD price chart which measures the price of gold against the US dollar, it can be seen that the price has shown a decline throughout the week after failing to pass the rise to the level of 1900.00.
Investors began to receive a bearish trend signal after the price moved below the Moving Average 50 (MA50) barrier level within the 1-hour time frame until the price headed to the support zone of 1850.00 in yesterday's trade.
However the decline failed to continue lower before showing a slow rise again.
Gold prices remain driven by volatile market sentiment which is also influenced by the movement of the US dollar.
The US dollar reacted to the development of the US economic stimulus measures after negotiations were postponed before the next presidential election. The Senate Majority Leader will resume talks with Democrats.
However, it was also a concern when US Treasury Secretary Steven Mnuchin stated that CARES emergency loan assistance would not be extended.
Such factors will be monitored by investors to assess the price movements of currencies and commodities such as gold.
Today's price increase is seen slowly testing the MA50 resistance level with the expectation of the nearest resistance level that will be the focus is at 1875.00.
Exceeding that level will push the price back to the focus level of 1900.00.
However, if the price manages to fall lower through the support zone of 1850.00, investors are likely to set a price target up to the level of 1800.00.
