Gold investors were sweating last week due to the sharp fall in the price of the yellow metal before last week's trading ended.
On the XAU / USD price chart which measures the value of gold against the US dollar, the price falling below the level of 1800.00 has shown a clear decline to the latest 8-week low.
The strengthening of the US dollar driven by the Wall Street market downturn as well as supported by US economic aid package sentiment has put pressure on current gold trading.
In last Friday's trading, the price has fallen lower breaking the 1765.00 level. The previous week's support level clearly failed to prevent the significant fall in gold prices which was pressed by the strengthening factor of the US dollar.
The price drop has reached the latest low around 1717.00 and recorded almost 600 pips daily decline!
However, continuing with the opening trade earlier this week, the price is seen showing a reversal from the level of 1717.00 to 1760.00 as far as the European session.
The increase of more than 400 pips is hindered in the SBR zone (support become resistance) 1765.00 and also the barrier level of Moving Average 50 (MA50) during the 1 hour time frame of price movement.
The zone will be an indicator for investors if the price shows a change in trend again.
The price of gold is expected to move weaker this week to fall back to the support level of 1720.00.
If the price succeeds, the price increase will return to the focus level of 1800.00 after the SBR zone 1785.00 is successfully passed.
