Gold trading began to show an early pattern of decline after last week’s gains failed to be sustained over the weekend.
The rise in gold prices was previously driven by the depreciation of the US dollar which was influenced by the decline in US treasury yields. However, at the end of the week, the US dollar strengthened again, also driven by the release of rising producer price index data and is seen to push up the US inflation rate.
On the XAU/USD price chart which measures the value of gold against the US dollar, it can be seen that the price increase is almost reaching the level of 1760.00.
After reaching the latest 5 -week high, the price declined again in Friday's trading with the price falling below the previous resistance level of 1745.00.
The price, which also moved back below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame, gave an early signal for the beginning of a bearish trend, making investors also wary of the re -fall in the value of gold in the market.
If the price makes a decline this week, the price is seen heading to the level of 1720.00 to test the RBS zone (resistance become support).
The lower decline will re-test the support zones in March trading around 1700.00 and also the 1680.00 level.
However, if the gold price manages to continue rising in the previous week, the SBR (support become resistance) zone of 1765.00 will be tested for the price to also surpass last week's high.
A higher rise through the zone is seen to push the gold price to reach the 1800.00 level again after the gold price fell below the 1800.00 level since February.