The XAU / USD price chart which measures the value of gold against the US dollar shows a slow price movement at the start of trading this week.
Although somewhat flat, the bearish pattern is shown to give an early signal for the possibility of a lower price drop.
Gold trading will be affected by market risk-on sentiment in the hopes of a US economic stimulus package to be presented to Congress this week.
The $ 908 billion stimulus package was divided into two separate sections aimed at getting approval from Congress.
This positive sentiment boosted investor confidence in the market as well as the positive development of the vaccine also restored risky market sentiment last week.
The price on the XAU / USD chart is moving below the Moving Average 50 (MA50) barrier level within the 1 hour time frame for the start of trading this week giving an early signal of a bearish trend.
A clearer decline in prices was exhibited at the start of the European session with a bearish test of last week's support level around 1830.00.
A lower downtrend is expected to reach the support level of 1800.00 before the price continues to decline next to the support zone tested at the end of November trading around 1764.00
If the price rises above the resistance level of MA50, the resistance of 1850.00 will be tested again after the price dropped below that level last week.
A higher rise is seen to test the resistance at the high level of 1875.00 reached last week.
