The XAU / USD price chart measuring the value of gold against the US dollar showed a drastic move earlier in the week.
Investors saw the price increase initially surpass the concentration level of 1900.00 then have plummeted back to 500 pips!
A significant drop in prices in the European session yesterday reached the level of 1855.00 testing the RBS (resistance become support) zone before the price soared again and closed the New York session trading around 1875.00.
The price of gold is seen as failing to stay above the 1900.00 level with the expectation that the US dollar will strengthen again.
Markets are still awaiting developments on new variants of the virus detected in Europe although concerns over the early weeks have eased slightly.
In addition, the development of the US economic stimulus package will also be monitored which will also affect US dollar trading.
Technically, the price moving below the Moving Average 50 (MA50) barrier level over the 1 hour time frame signals a bearish move.
If the price continues to decline lower, the RBS zone of 1850.00 will be tested again before further declines have the potential to hit again up to the concentration level of 1800.00.
However, if the price of gold goes up this week, the resistance zone at 1900.00 will be tested again.
Further, higher increases will see the levels of focus as in 1910.00 and 1938.00 become price target destinations.
