The news that shocked the people of the United States (US) today that the $ 2.3 trillion economic aid package signed by President Donald Trump has also had a positive impact on the market.
The US dollar was clearly showing a downtrend and moving weaker against other major currencies in early trading this week.
The XAU / USD chart which measures the price of gold against the US dollar initially saw the price rise at the beginning of the Asian session.
The price hike touched the focus level of 1900.00 before the price of gold began to plummet again to continue with the European session.
The drop was seen as driven by the actions of investors who let go of safe-haven assets including gold following market risk-on sentiment after Trump signed a US economic stimulus package.
As usual when market sentiment turns positive, investors will start releasing safe-haven assets and start shifting to higher-return assets.
Thus, the price of gold began to show a decline. However, if the value of the US dollar declines more significantly, it is likely to have a reversal of the gold price.
The price drop to the support level of 1875.00 will be evaluated to see the price reaction in the zone.
If the price jumps again, the price will return to the focus level of 1900.00 before continuing to rise higher.
On the other hand, if the price of gold continues to fall, the RBS zone (resistance become support) at 1850.00 will next be tested.
