The price movement on the XAU / USD chart which measures the price of gold against the US dollar again showed a significant decline in trading on Wednesday ending the bullish pattern since last week.
Price movements remain driven by market sentiment with a focus on the US economic stimulus package with slow developments that have yet to give investors confidence.
The price which has reached the high level of 1875.00 on the rise at the beginning of the week returned to the price jump again in yesterday's trade from the SBR zone (support become resistance).
After the price drops below the Moving Average 50 (MA50) barrier level over the 1 hour time frame, the 1850.00 level becomes the price support.
However, after once again testing the MA50 barrier and failing to make a rise, the price was seen to have plummeted at the beginning of the New York session until almost 400 pips reached its lowest level around 1826.00 making the daily price drop around 450 pips since the Asian session.
But the price closed again the New York session trade slightly higher around 1840.00 and flattened around that level on the trade that continues to the Asian session this morning.
Despite moving slowly, the bearish pattern is still visible on the XAU / USD chart today with the expectation of further price declines heading back to the 1800.00 support zone.
The fall in gold prices will see the price return to the support zone last week above the price level of 1760.00.
On the other hand, if the price rises again, the level of 1850.00 will return to the price resistance as well as the dynamic barrier of MA50 will also be tested.
Passing these levels will signal a bullish trend again for the price of gold.
